A local labor market for lawn-mowing workers is initially in equilibrium. If researchers develop a new inexpensive grass seed that provides a lush, slow-growing lawn, which of the following will occur in the short run?
a. Both labor demand and labor supply will drop, leading to a higher wage rate but lower employment.
b. Both labor demand and labor supply will rise, leading to a lower wage rate and lower employment.
c. Labor demand will drop, leading to a lower wage rate and higher employment.
d. Labor supply will drop, leading to a higher wage rate and lower employment.
e. Labor demand will drop, leading to a lower wage rate and lower employment.
E
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Professional football players receive, on average, higher wages than professional soccer players in the United States because
A) football is a more dangerous sport. B) professional football teams can draw huge crowds and charge high prices for tickets. C) professional football teams use a draft system. D) the soccer season is longer and so players will be unemployed for a smaller portion of the year.
Assume that the government proposes a negative income tax that calculates the taxes owed as follows: taxes owed equal 30% of income less $12,000 . A family that earns an income of $40,000 will
a. neither pay taxes nor receive an income subsidy. b. receive an income subsidy of $3,600. c. pay $3,600 in taxes. d. pay $12,000 in taxes.