The theory of efficiency wages challenges the assumption that
a. workers are efficient.
b. workers have an incentive to shirk their responsibilities to their employers.
c. wages must always adjust to balance labor supply and labor demand.
d. firms sometimes choose to pay their workers above-equilibrium wages.
c
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Suppose there is an unusually large crop of apples this year. How might this affect the market for apples?
A. The demand would increase, increasing both equilibrium price and quantity. B. The supply would increase, decreasing equilibrium price and increasing equilibrium quantity. C. The demand would decrease, decreasing both equilibrium price and quantity. D. The supply would decrease, increasing equilibrium price and decreasing equilibrium quantity.
Along the classical or vertical range of the aggregate supply curve, an increase in the aggregate demand curve will increase:
a. both the price level and real GDP. b. only real GDP. c. only the price level. d. real GDP and reduce the price level.
Use the graph below to answer the next question.
Other things equal, a decrease in the price of a substitute resource would cause a
A. move from a to b on D1. B. move from b to a on D1. C. shift from D3 to D2 assuming the output effect exceeds the substitution effect. D. shift from D2 to D3 assuming the output effect exceeds the substitution effect.
(Advanced analysis) Answer the question on the basis of the following information. The demand for commodity X is represented by the equation P = 10 - 0.2Q and supply by the equation P = 2 + 0.2Q. Refer to the given information. If demand changed from P =
10 - .2Q to P = 7 - .3Q, the new equilibrium quantity is: A. 10. B. 20. C. 15. D. 30.