An industry would be likely to lay off workers following
A. a successful attempt by an inclusive union to push wages above the marginal revenue product of labor.
B. an increase in the price of the firm's product.
C. the imposition of a new minimum wage below the current equilibrium wage.
D. an increase in the marginal revenue product of labor.
Answer: A
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The above figure shows the supply curves in four different markets. If each of the markets has an identical downward sloping demand curve and the same tax is levied on suppliers, which market would produce the largest amount of deadweight loss?
A) A B) B C) C D) D E) A and D
The price of coffee rose 40 percent and the quantity of coffee demanded fell by 20 percent. The quantity of doughnuts demanded also fell by 20 percent. From this information, we can conclude that
A) the demand for coffee is elastic. B) the demand for coffee is unit elastic. C) coffee is an inferior good. D) the cross elasticity demand between coffee and doughnuts is -0.5. E) the income elasticity of demand for coffee is 2.
The symmetry principle in economics means that
A) all individuals must have similar outcomes. B) all similar individuals must be treated similarly. C) individuals must have opposite outcomes. D) similar individuals must have similar outcomes.
If economies of scale are present, a firm can enhance its profits by
a. operating at any larger scale. b. operating at any larger scale up to the optimal scale. c. operating beyond the optimal scale. d. operating at a lower scale.