Suppose that the mayor of Pittsburgh decides to levy a tax on firms in the city. It will use the additional tax revenue to construct a museum. The new museum would not increase the city's demand for labor; instead, the museum is viewed as a positive amenity for the city's workers. What does the standard model of the urban labor market predict will happen to the city's wages and employment? A. Wages will unambiguously increase. B. Wages will unambiguously decrease. C. Employment will unambiguously increase. D. Employment will unambiguously decrease. E. (A) and (C) F. (A) and (D) G. (B) and (C) H. (B) and (D)

Suppose that the mayor of Pittsburgh decides to levy a tax on firms in the city. It will use the additional tax revenue to construct a museum. The new museum would not increase the city's demand for labor; instead, the museum is viewed as a positive amenity for the city's workers. What does the standard model of the urban labor market predict will happen to the city's wages and employment? A. Wages will unambiguously increase. B. Wages will unambiguously decrease. C. Employment will unambiguously increase. D. Employment will unambiguously decrease. E. (A) and (C) F. (A) and (D) G. (B) and (C) H. (B) and (D)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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