Refer to Scenario 1.1 below to answer the question(s) that follow.SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers.Refer to Scenario 1.1. The statement that an increase in the minimum wage causes an increase in teenage unemployment is an example of
A. normative economics.
B. deductive reasoning.
C. a fallacy.
D. an economic theory.
Answer: D
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A graph shows the wage rate of factory workers. The slope of the line is positive for periods when the wage rate is
A) low and falling. B) high and not changing. C) rising. D) high and falling. E) falling.
When there are few substitutes available for a good, demand tends to be relatively inelastic
Indicate whether the statement is true or false
Two types of costs must be considered when selecting the optimal decision rule. They are _____ and _____
a. decision-making costs; external costs b. marginal costs; variable costs c. decision-making costs; political costs d. political costs; external costs
What is the most likely response by rivals when an oligopolist cuts its price to increase its sales?
A. Raise their prices. B. Cut their prices. C. Ignore the change. D. Reduce their costs.