Refer to the Following Graph of the Demand for and Supply

question 27

Multiple Choice

refer to the following graph of the demand for and supply of armed forces personnel.



-Suppose the government uses a voluntary system.Its demand for labor is D_v and it wishes to attract H workers at a wage of $B.Which of the following best describes the distribution of costs that will result?

• A)Taxpayers pay 0BEH,enlistees receive ABEI
• B)Taxpayers pay 0BEH,enlistees pay ABEI
• C)Taxpayers pay 0AIH,enlistees pay ABEI
• D)Taxpayers pay 0BEH; enlistees receive an amount equal to their opportunity costs

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Definitions:

Consumer Price Index

An index that measures the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

Substitutes

Products that serve similar purposes. An increase in the price of one will cause an increase in demand for the other (examples are hamburgers and tacos, butter and margarine, Chevrolets and Fords).

Cable TV

is a system of delivering television programming to consumers via radio frequency signals transmitted through coaxial cables.

Satellite TV

A television system that delivers programming to viewers by broadcasting from a communications satellite orbiting the Earth directly to the viewer's location.