The theory that stock prices reflect all available information and that the future movement of stock prices is unpredictable is called the

When earnings differentials are adjusted for such factors as age, education, and marital status, the

a. differential between the earnings of white males and those of minority males increases. b. differential between the earnings of white males and those of minority males decreases. c. corrected earnings of minority males are equal to those of similar white men. d. corrected earnings of minority males are greater than those of similar white men.

Consider a worker who consumes a composite consumption good (on the vertical axis) and leisure hours (on the horizontal axis).

a. Suppose the worker has 80 hours of leisure per week and can earn a wage of $50 per hour. Illustrate the worker's weekly budget constraint. b. In order to close the deficit, the government introduces a broad-based consumption tax on all consumer goods -- raising the price of the consumption good by 20%. Illustrate the new budget constraint faced by our worker. c. On your graph, indicate the level of tax revenue raised by this broad-based consumption tax. d. Using your graph, discuss why this tax is inefficient. e. In this model is there any difference between the consumption tax and a wage tax? What is different about the real world that would change your conclusion about this? What will be an ideal response?