Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
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Chapter 5.A, Problem 1ADQ
To determine
Affirmative and negative majority votes and inefficient allocation of resources.
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There is Village A where the luxury axiom and the substitution axiom are satisfied (as discussed in Chapter 6). In this village, 200 households and 100 firms exist. Each household is composed of 4 household members: two adults and two children. One of the children is a teenage daughter and the other is a teenage son. The subsistence level of consumption for each individual is s = 2.5.
One of the two adults in each household works on its private land and produces the value of agricultural output a = 3. The other adult earns a wage by working for a firm and decides whether to work at the firm with the two children. Regarding the labour input for firm’s production, one unit of child labour is equivalent to 0.5 units of adult labour. Accordingly, the child wage is half of the adult wage.
Each firm produces output according to the following production function.
Output = 16(Adult Equivalent Labour)^(1/2)
We assume that the adults working on their private lands cannot work for firms. Wages,…
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Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
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- There are many different ways that governments collect taxes. In Zambia alone there are income taxes, taxes on copper and other mining royalties, taxes on property and financial transactions among others. One common tax is sales tax. Sales taxes are collected by the retailer when the final sale in the supply chain occurs via a sale to the end customer. In some parts of the world, however, rather than a sales tax, there is a Value Added Tax (VAT). In a VAT system taxes are collected by all sellers in each stage of the supply chain. Suppliers, Manufacturers, Distributors, and Retailers all collect the VAT on applicable sales and consumers pay the VAT on their purchases. The Zambian government in recent years has heavily debated the merits of which system is better a national sales tax on end purchase transactions or a VAT which collects taxes at each stage. For the purposes of this research paper, debate whether Zambia should have a national sales tax system or a VAT system. Which…arrow_forwardThe U.S. Census Bureau conducts annual surveys to obtain information on the percentage of the voting-age population that is registered to vote. Suppose that 679 employed persons and 690 unemployed persons are independently and randomly selected, and that 429 of the employed persons and 369 of the unemployed persons have registered to vote. Can we conclude that the percentage of employed workers (P1), who have registered to vote, exceeds the percentage of unemployed workers (P2), who have registered to vote? Use a significance level of α = 0.05 for the test. Step 5 of 6: Determine the decision rule for rejecting the null hypothesis Ho. Round the numerical portion of your answer to three decimal places.arrow_forwardDon't give AI generated solution Give only typing answer with explanationarrow_forward
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