A shift in the supply curve of bicycles resulting from higher metal prices will lead to higher prices lower prices a shift in the demand curve larger output a. b C. d.

a cost that cannot be avoided, regardless of what is done in the future the additional cost of producing an additional unit of output the additional cost of buying an additional unit of a product Question 3 The law of demand states that, ceteris paribus, price and quantity demanded are O directly related inversely related uniformly related horizontally related Question 4

6. Who should pay the tax? The following graph gives the labor market for laboratory aides in the imaginary country of Sophos. The equilibrium hourly wage is $10, and the equilibrium number of laboratory aides is 250. Suppose the federal government of Sophos has decided to institute an hourly payroll tax of $4 on laboratory aides and wants to determine whether the tax should be levied on the workers, the employers, or both (in such a way that half the tax is collected from each party). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the…

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