When there is a price floor there will be
A. a shortage.
B. a surplus.
C. either a shortage or a surplus.
D. neither a shortage nor a surplus.
B. a surplus.
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A decrease in the price of a complement in production leads to
A) no change in the supply of the good in question. B) an increase in the supply of the good in question. C) a decrease in the supply of the good in question. D) a decrease in the quantity supplied of the good in question. E) an increase in the supply of the good in question and a decrease in the quantity supplied of the good in question.
The chapter shows that as a general rule people with more education earn higher salaries. Economists have offered two explanations of this relationship
The human capital argument says that high schools and colleges teach people valuable skills and employers are willing to pay higher salaries to attract people with those skills. The signaling argument says that college graduates earn more because a college degree is a signal to employers that a job applicant is diligent, intelligent, and persevering. How might you use data on people with two, three, and four years of college education to shed light on this controversy?
A nonprice determinant of demand refers to something that:
A. affects the price other than demand. B. affects demand other than the price. C. determines how large a role prices play in the demand decision. D. determines how prices are affected by income.
Which of the following is true if the total variable cost curve is rising?
a. Average fixed cost is increasing. b. Average fixed cost is constant. c. Marginal cost is decreasing. d. Marginal cost is increasing.