If a union wishes to maximize the number of union members employed, it will
A. set a wage where the elasticity of demand for labor equals one.
B. accept the competitive wage.
C. set a wage above the competitive wage.
D. set a wage below the competitive wage.
Answer: B
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If a firm has short-run losses, will it stay open? Under what conditions will a firm close in the short run? Explain.
What will be an ideal response?
It should not be surprising if the public sector fails to pay for the right amount or right kinds of basic research because
a. basic research is not a public good. b. the benefits of basic research are hard to measure. c. members of Congress usually have little expertise in science. d. Both b and c are correct.
If the opportunity cost is 2X = 1Y for country A and 1X = 3Y for country B, then a possible terms of trade is:
A) 1X = 1/3Y. B) 1X = 1/4Y. C) 1X = 1/5Y. D) 1/2X = 1Y.
Assume the price of pizza decreases. As a result, your real income increases and you increase the quantity of pizza purchased each month. This is an example of the:
a. substitution effect. b. income effect. c. revenue effect. d. consumer price effect.