Economists recognize that because people have limited resources:
A. they will never be happy.
B. our future is bleak.
C. they have to make trade-offs.
D. government intervention is necessary.
Answer: C
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A binding minimum wage tends to
a. cause a labor surplus. b. cause unemployment. c. have the greatest impact in the market for teenage labor. d. All of the above are correct.
Kris, Taylor and Max are the only three residents in a neighborhood. A public good that would benefit all of them has a one-time installation cost of $900. The value of the public good to each resident is shown in the table below. Any tax plan must be approved by simple majority. ResidentReservation PriceIncomeKris$100$1,000Taylor$200$5,000Max$700$6,000 Installing the public good would ________ total economic surplus by ________.
A. decrease; $100 B. increase; $100 C. increase; $1,000 D. decrease; $900