Suppose that the market labor supply and labor demand equations are given by Qs = 5W and Qd = 30 ? 5W. The government has passed a law that subsidizes wages by $1 per hour. The equilibrium wage and quantity of labor with the subsidy is:
A. $2.5 and 12.5 workers, respectively.
B. $3.5 and 17.5 workers, respectively.
C. $4 and 15 workers, respectively.
D. $3.5 and 10 workers, respectively.
Answer: B
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The belief that wages are "sticky downwards" was held by:
A. Keynes, but not the classical macroeconomic theorists. B. neither Keynes nor the classical macroeconomic theorists. C. the classical macroeconomic theorists, but not Keynes. D. both Keynes and the classical macroeconomic theorists.
Refer to the information provided in Figure 4.4 below to answer the question(s) that follow.
Figure 4.4Refer to Figure 4.4. The price of oil in the United States would be $125 per barrel, and the United States would import 6 million barrels of oil per day if the United States levies ________ per barrel tariff on imported oil.
A. no B. a $25 C. a $50 D. a $100
Mary Jane is willing to babysit for $6 an hour. Her neighbor has asked her to babysit for $8 an hour. Assuming Mary Jane accepts the offer:
A. her accounting profit will be $8 per hour, and her economic profit will be $0 per hour. B. her economic rent will be $2 per hour. C. her consumer surplus will be $2 per hour. D. her economic profit will be $8 per hour.
In monopolistic competition, there are ________
A) many firms selling products for which no good substitutes exist B) many firms selling similar but slightly different products C) many firms, each selling an identical product D) a small number of firms, each selling an identical product