Featherbedding allows unions to increase wages by:
A. limiting the supply of labor.
B. increasing firms' demand for labor.
C. forcing firms to accept higher-than-equilibrium wages.
D. reducing labor share of payroll taxes.
Answer: B
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The price elasticity of demand changes as we move along a
a. horizontal demand curve. b. vertical demand curve. c. linear, downward-sloping demand curve. d. All of the above are correct.
Which of the following best explains why the behavior of an individual firm in an oligopoly is difficult to predict?
a. Each firm is interdependent. b. Each firm is a perfect competitor. c. There are a large number of firms. d. The price follower is difficult to identify.
A "dirty float" is a system
A. Of free-floating exchange rates. B. Of managed exchange rates. C. Based on the gold standard. D. Of fixed exchange rates.
Consider a product with a perfectly competitive market. Carefully explain why nations gain from engaging in international trade in this product. Do nations gain equally from trade? If not, what determines which country gains more? (In your answer you can assume a two-country world.)
What will be an ideal response?