The Bubby Gum factory produces bubble gum. Joanne is one of the employees, and she produces 10 packs of bubble gum per hour. Joanne's money wage rate is $12 per hour. Based on this information, the Bubby Gum company should
A) fire Joanne because she creates a loss for the firm.
B) increase its demand for labor.
C) decrease Joanne's wage rate because she is paid too much.
D) keep Joanne because she creates a profit for the firm.
E) None of the above answers is correct because more information about Joanne's real wage is needed to decide what to do.
E
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If the price elasticity of demand is unit elastic, a 10 percent increase in price will result in a 10 percent increase in revenue
Indicate whether the statement is true or false
Which of the following describes a situation in which demand must be elastic?
a. Total revenue increases by 15 percent when the price of corndogs rises by 15 percent. b. Total revenue increases by less than 15 percent when the price of corndogs rises by 15 percent. c. Total revenue decreases by more than 15 percent when the price of corndogs rises by 15 percent. d. Total revenue increases by $15 when the price of corndogs rises by $15. e. Total revenue increases by more than $15 when the price of corndogs rises by $15.
Any central bank policy that influences the domestic interest rate will:
A. not impact the supply of and demand for the domestic currency if exchange rates are flexible. B. be compatible with fixed exchange rates. C. have an effect on the exchange rate. D. have no effect on the exchange rate if exchange rates are flexible.
If banks decide to hold excess reserves, the multiple expansion of bank deposits will be limited.
Answer the following statement true (T) or false (F)