Which of the Following Transactions Would Take Place in the 'Underground

question 115

Multiple Choice

Which of the following transactions would take place in the 'underground economy'?

• A)Elizabeth tells her mother she's going to work but really goes to see a movie.
• B)Paul buys 15 litres of petrol for $1.45 per litre, not realising that 40 cents per litre of that price goes to the government as tax revenue.
• C)John makes chain-link belts and necklaces and sells them at a local market for cash to avoid paying taxes.
• D)Matt bought an iPhone for $400 but decided to sell it on eBay instead of keeping it.

Explain the concept of marginal cost of labor and how it relates to the wage rate in monopsonistic markets.

Understand the demand and supply dynamics in markets and their impact on pricing and quantity.

Analyze how production functions and demand curves determine profit-maximizing output levels in monopolistic markets.

Explain the effects of supply and demand shifts on market equilibrium.