Suppose that the state of California imposes a minimum wage of $7 per hour. In the entry-level labor market in California fast-food restaurants, the quantity of labor demanded at $7 per hour is 800 thousand, and the quantity of labor supplied is 1.2 million. Which of the following is true?
a. There is a surplus of 1.2 million workers in the labor market.
b. There is a surplus of 400 thousand workers in the labor market.
c. There is a shortage of 400 thousand workers in the labor market.
d. There is a shortage of 800 thousand workers in the labor market.
b
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Unemployment in the United States varies considerably over time.
Answer the following statement true (T) or false (F)
To reduce labor costs, companies often invent machines and methods to produce products and reduce the amount of labor required. This is called
A) anti-union. B) downsizing. C) failed labor utilization. D) induced innovation.
A strategy which is universally best, regardless of the strategy chosen by others, is called a
A) Nash strategy. B) dominant strategy. C) mutually interdependent strategy. D) zero-sum strategy.
Refer to the above table. Which of the following statements is correct?
A) The table follows economic principles because in an increasing cost industry, increases in a variable input will lead to increase in output. B) The table does not follow economic principles because in an increasing cost industry, increases in a variable input will lead to decrease in output. C) The table follows economic principles because the law of diminishing marginal product predicts that increase in a variable input will eventually lead to a decrease in the marginal physical product. D) The table does not follow economic principles because the law of diminishing marginal product predicts that increase in a variable input will eventually lead to an increase in the marginal physical product.