A firm that is a monopolist in the output market and a monopsonist in the input market
A. will hire the same amount of labor as if perfect competition prevailed in both markets, but pay a lower wage.
B. will hire less labor and pay a lower wage compared to the perfectly competitive case.
C. will hire less labor but pay the same wage compared to the perfectly competitive case.
D. will restrict the level of output but not that of employment compared to the perfectly competitive case.
Answer: B
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Starting from long-run equilibrium, a sharp drop in oil prices results in ________ output in the short run and ________ output in the long run.
A. lower; higher B. lower; potential C. higher; higher D. higher; potential
Despite the monetary expansion of the 1992-2000 period, the inflation rate
a. rose due to adverse supply shocks. b. rose due to large increases in aggregate demand. c. fell despite adverse supply shocks. d. fell due to favorable supply shocks.
All of the following statements are true of the American economy since 1995, EXCEPT
A. technological change was the most important factor contributing to economic growth. B. Americans worked fewer hours per year in 1990 than they did in 2004. C. productivity rose by more than 3 percent in at least four years since 1995. D. the American savings rate was 0 percent in 2005.
Which statement about inflation is correct?
A. The redistributive effects of inflation are arbitrary with respect to people and groups in society. B. Inflation "subsidizes" those who receive relatively fixed money income. C. Inflation will decrease the real value of property assets and increase the real value of fixed-value assets. D. Families are always hurt by inflation.