In a competitive labor market, if the supply of labor increases, wages will:
A. decrease.
B. increase.
C. remain the same.
D. drop to zero.
Answer: A
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Which of the following statements is true of the price elasticity of? demand?
A) As the number of substitutes for a product increases, the price elasticity of demand for that good decreases. B) If the budget share of a particular good in a consumer's bundle increases, the price elasticity of demand for that good is likely to decrease. C) The price elasticity of demand for a good is generally higher in the long run than in the short run. D) The demand for a good with a price elasticity of demand of zero is highly responsive to price changes.
According to the Monetarists a decrease in investment spending initially __________ unemployment so that the price level __________. The resulting __________ in the real money supply __________ spending
A) increases; rises; increase; decreases B) increases; falls; increase; increases C) increases; falls; increase; decreases D) decreases; rises; increase; increases
The common ownership of natural resources frequently leads to
(a) an efficient resource allocation. (b) an even distribution of resources. (c) an uneven distribution of resources. (d) a productive use of resources.
If the interest rate rises, then firms' investment spending:
a. falls. b. also rises. c. remains unchanged d. reacts unpredictably.