According to the graph shown, if the price were $5 a:
A. shortage would exist, signaling buyers to bid up the price.
B. surplus would exist, signaling sellers to drop their price.
C. surplus would exist, signaling buyers to bid up the price.
D. shortage would exist, signaling sellers to leave the market.
Answer: A
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Refer to Table 4-8. Suppose that the quantity of labor demanded 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 = $8.00; Q = 390,000 B) W = $8.50; Q = 380,000 C) W = $10.00; Q = 390,000 D) W = $9.50; Q = 380,000
When a perfectly competitive firm finds that its market price is below its minimum average variable cost, it will sell
A) any positive output the entrepreneur decides upon because all of it can be sold. B) nothing at all; the firm shuts down. C) the output where average total cost equals price. D) the output where marginal revenue equals marginal cost.
Which of the following is a disadvantage of the corporation compared to the sole proprietorship?
a. limited liability b. difficulty raising start-up money c. lack of profitability d. corporate income is taxed twice e. corporations are more vulnerable in the case of the death of an owner
Explain the two stabilization policies politicians use to smooth business cycles
Please provide the best answer for the statement.