Is the minimum wage an example of a price floor or a price ceiling? Why?
What will be an ideal response?
The minimum wage is an example of a price floor. A price floor sets the lowest price at which it is legal to trade a particular good, service, or factor of production. The minimum wage is a price floor imposed in the labor market. The minimum wage sets the lowest price for which labor can be traded. It is illegal to buy (or to sell) labor for less than the minimum wage.
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An appreciating yen makes Japanese products
A) more expensive in both foreign markets and the Japanese market. B) more expensive in foreign markets. C) more expensive in the Japanese market. D) less expensive in foreign markets.
Jill consumes nothing but soup and cola. It is possible that both soup and cola are necessities for Jill
Indicate whether the statement is true or false
For a competitive market,
a. a seller can always increase her profit by raising the price of her product. b. if a seller charges more than the going price, buyers will go elsewhere to make their purchases. c. a seller often charges less than the going price to increase sales and profit. d. a single buyer can influence the price of the product but only when purchasing from several sellers in a short period of time.
The kinked-demand curve model of oligopoly:
A. assumes a firm's rivals will ignore a price cut but match a price increase. B. embodies the possibility that changes in unit costs will have no effect on equilibrium price and output. C. assumes a firm's rivals will match any price change it may initiate. D. assumes a firm's rivals will ignore any price change it may initiate.