Symbols: Q = Number of Workers Demanded; W = Wage

question 234

Multiple Choice

Symbols: Q = number of workers demanded; W = wage rate; and VTP = value of the cumulative total product (output) of the particular number of workers. Assumptions: (1) The current wage in Zinnia is $18, and the current wage in Marigold is $14; (2) full employment exists in both countries. If migration is costless and unimpeded, the wage in both countries will equalize at

• A)$16.
• B)$18.
• C)$20.
• D)$14.

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Definitions:

Mutually Beneficial Transactions

Economic exchanges where both parties gain value or benefit from the transaction.

No-Tax Equilibrium

A market situation where goods or services are exchanged without the imposition of taxes, leading to an unaltered allocation of resources.

Elastic Demand

The case in which the price elasticity of demand is greater than 1.

Excise Tax

A tax levied on specific goods, services, or transactions, often with the aim of discouraging their use or raising revenue.