If a consumer is buying only two goods, A and B, then he or she will be in equilibrium only when MUa = MUb
a. True
b. False
Indicate whether the statement is true or false
False
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If policy makers believe that the equilibrium wage rate is too low, policy makers can raise wages by legislating a minimum wage, that is, a wage
A) ceiling above the equilibrium wage. B) ceiling below the equilibrium wage. C) floor above the equilibrium wage. D) floor below the equilibrium wage.
The equilibrium effects of a temporary increase in government spending include
A) an increase in the real wage and an increase in the real interest rate. B) an increase in the real wage and a decrease in the real interest rate. C) a decrease in the real wage and an increase in the real interest rate. D) a decrease in the real wage and a decrease in the real interest rate.
Conspicuous consumption is a more effective signal of ability for people who:
A. live in small towns instead of large cities. B. live in large cities instead of small towns. C. don't understand moral hazard. D. already have well-established reputations.
An industry which has a 4-firm concentration ratio near 0 would best be described as
A. oligopoly. B. monopoly. C. perfect competition. D. monopolistic competition.