You sell t-shirts in the street corner in order to support some of your tuition costs. Around the middle of the semester, your friend Carlos gives you the following advice: "if you increase the price of each t-shirt you sell you will be able to make a lot more money selling your t-shirts". For Carlos to be right, the price elasticity of t-shirts must be price:
a) constant
b) elastic
c) unitary
d) inelastic
d) inelastic
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If there is a surplus of a good, the quantity demanded is ________ the quantity supplied, and the price will ________
A) less than; rise B) less than; fall C) greater than; rise D) greater than; fall E) equal to; fall
The minimum point of the average total cost curve always occurs at a larger output level than the minimum point of the average variable cost curve because:
A. marginal cost is rising. B. average fixed costs are falling. C. marginal cost is falling. D. average fixed costs are rising.
Classical unemployment can be caused by which of the following?
A. Efficiency wages B. Bargaining by unions C. Minimum wage laws D. All these create classical unemployment.
Refer to Figure 21-26. Rhonda experiences an increase in her hourly wage. Her optimal choice point moves from A to B. For Rhonda,
a. Leisure is a normal good. b. Her labor supply curve is backward bending. c. Both a and c are correct. d. Her labor supply curve is upward sloping.