The equilibrium wage rate in an industry is determined by
A) finding where the market supply curve indicates that the substitution effect and income effect of a wage increase are offsetting.
B) the intersection of the market demand curve for labor and the market supply curve for labor.
C) the strength of the substitution effect relative to the elasticity of demand for labor.
D) whether workers or management are better at negotiating.
Answer: B
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Use the above figure. The profit this monopolist earns is closest to
A) $3,000. B) $4,800. C) $1,600. D) $1,000.
A nominal wage is: a. always equal to the legal minimum wage
b. the same as the efficiency wage. c. measured in terms of the amount of goods and services it can purchase. d. measured in current dollars rather than in constant dollars. e. measured in constant dollars rather than in current dollars.
Define the following terms briefly and concisely and indicate their importance to the study of economics
a. entrepreneurship b. investment c. capital d. innovation e. discounting
Which of the following is an example of a normative statement?
a. If the price of CDs drops significantly, BlankCD, Inc. will declare bankruptcy. b. If the price of CDs drops significantly, the demand for CDs will increase. c. If the price of CDs drops significantly, the CEO should sell BlankCD, Inc. d. If the price of CDs drops significantly, the supply of CDs will also drop.