Answer the following statement true (T) or false (F)
1) Industrial unions are more likely to increase wage rates by restricting the supply of labor than
are craft unions.
2) The labor supply curve facing a purely competitive firm is perfectly inelastic.
3) The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.
4) Inclusive unions restrict the number of jobs directly by shifting the labor supply curve to the
left; exclusive unions restrict the number of jobs by imposing above-equilibrium wage rates on
the employer.
5) Critics of the minimum wage contend that higher minimums cause employers to move up their
labor demand curves, reducing employment of low-wage workers.
1) F
2) F
3) T
4) F
5) T
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
In the above figure, along the section of the demand curve between point a and point b, demand is
A) elastic. B) inelastic. C) unit elastic. D) unit inelastic.
Which of the following causes a leftward shift in the short-run aggregate supply curve?
A. an increase of goods prices while nominal incomes are unchanged B. an increase in nominal incomes (wages and salaries) C. an increase of full-employment real GDP D. an increase of personal consumption expenditures while the price level is unchanged
Economics is most precisely defined as
A) a study of what people need to survive. B) a study of how culture evolves in different geographic areas. C) the same as the study of finance and management. D) the study of how people make choices.