Refer to Table 4-7. Suppose that the quantity of labor supplied increases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?
A) W = $12.50; Q = 630,000 B) W = $8.50; Q = 550,000
C) W = $11.50; Q = 610,000 D) W = $9.50; Q = 610,000
D
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The intertemporal budget constraint tells us that
A) the income earned in a lifetime will be evenly divided between consumption and saving. B) the present value of lifetime consumption equals the present value of lifetime income. C) household consumption is based on permanent income and not transitory income. D) consumption smoothing only occurs in years when income is greater than consumption.
A positively sloped long run average cost implies:
a. economies of scale. b. constant returns to scale. c. diseconomies of scale. d. diminishing marginal returns to a factor. e. increasing returns to scale.
International specialization allows a country to use its resources to
a. create jobs for government workers by expanding international foreign aid programs b. produce special goods such as computer software that require specific knowledge c. expand the development of its natural resources such as lumber, oil deposits, and coal d. produce specific goods, allowing other countries to focus on the production of other goods e. develop political ties through international cooperation and mutual sharing of goods
Which of the following is true if equilibrium is present in a market?
a. Quantity demanded equals quantity supplied. b. Quantity supplied exceeds quantity demanded. c. There is generally either a shortage or a surplus. d. Quantity demanded exceeds quantity supplied.