ch4 - a. increase and both the demand for and prices of the...

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Mike Lowry 700900733 Chapter 4 True/False 9) The minimum wage increases underemployment among unskilled workers. True- people are willing to work for less if they are unskilled. Projects and Problems 1) Exhibit 1 shows the job market for accountants. Using exhibit 1(i), show how an increase in the number of students majoring in accounting would affect the wage rate and underemployment of accountants. Using exhibit 1(ii), show how a tax reform that vastly increased the simplicity of the tax code would affect the wage rate and employment of accountants. i) An increase in the supply of accountants would lower the equilibrium wage and raise equilibrium employment. ii) This would decrease the demand for accountants lowering the equilibrium wage and equilibrium employment. Multiple Choice 1) the increase in the demand for a product will cause output to
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Unformatted text preview: a. increase and both the demand for and prices of the resources used to produce the product to increase b. increase and both the demand for and prices of the resources used to produce the product to decrease c. Decrease; the demand for the resource used to produce the product will remain constant. d. Decrease; the price of resources used to produce the product will decrease. A- The demand for resources will increase when the demand for the product rises. 2) the ave. tax rate is defined as a. taxable income divided by tax liability b. change in tax liability divided by change in taxable income c. tax liability divided by taxable income d. change in taxable income divided by change in tax liability C- This is the formula for computing the ave. tax rate given in the text....
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This note was uploaded on 09/11/2008 for the course ECON 201 taught by Professor Douglas during the Spring '07 term at WVU.

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