In the formula for Bayes Theorem, if the w-probability is greater than zero then

Question

In the formula for Bayes Theorem, if the w-probability is greater than zero then the a-probably is less than the b-probability. If people drop out of the labor force because they stop looking for jobs, then the unemployment rate will rise. Running the price clock in a Dutch auction once will produce higher observed prices compared to running the clock twice. If losers pay winners in a sealed bid auction, then they wilt eventually be willing to bid up to 75 percent more than the winning prize. With only one seller in a posted offer market, prices will tend to move upward toward the monopoly price. Adjusting the concentration of sweet versus sour enabled rats to have a large negative income effect for sour water. A sales tax on large luxury boats will impact the buyers more than the sellers of these boats; causing the buyers to pay more than half the cost of the sales tax. If each seller knew all sellers unit costs and each buyer knew a buyers unit values, a buyer or seller would be able to calculate the competitive equilibrium price before an experiment began.

Explanation / Answer

Q2. The given statement is False.

Reason - Unemployment rate is calculated by dividing the number of unemployed by labor force.

If people drop out of labor force because they stop looking for jobs then in such case labor force will decrease.

However, since these people are stop looking for jobs they are erstwhile unemployed workers.

So, their quiting the labor force also decrease the number of unemployed.

When both numerator and denominator of a fraction decreases and that also by the same number then the value of fraction declines.

So, when both number of unemployed and labor force will decrease and that also by same quantum then ratio of the two that is unemployment rate will also decrease.

So, the unemployment rate will fall.

Q9. The given statement is True.

Reason - It has been stated that only income tax rate pertaining to annual income above $250,000 per annum has been increased. In other words, income tax rates on income below $250,000 has remained same.

So, if a person has annual income below $250,000, his after tax income will remain unaffected.

Thus, if our annual income is $100,000 then our after-tax income will be unaffected.

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