A key tenet of the supply-side economic theory of the 1980s was that government tax cuts would increase after-tax wages, stimulating the incentive to seek higher wages through increased labor supply

Rania is selling boxes of cookies door to door in her neighbourhood. At a price of $10 per box she sold 40 boxes per day. When the price was reduced to $4 per box she sold 100 boxes per day. Assuming that the demand conditions were unchanged, what is the price elasticity of demand for Rania's cookies?

A) -1.7 B) 1.17 C) 1 D) 0 E) 0.85

Suppose a firm can only vary the quantity of labor hired in the short run. An increase in the cost of capital will

A) increase the firm's marginal cost. B) decrease the firm's marginal cost. C) have no effect on the firm's marginal cost. D) More information is needed to answer the question.