If a prospective employee is not offered his/her reservation utility or reservation wage, then he/she will
A. tend to look for another job or withdraw from the labor market.
B. seek a larger fringe benefit package.
C. accept the job because a wage below the reservation utility is very attractive.
D. use the job as the basis for a career, assuming that wages will increase beyond the marginal revenue product over time.
Answer: A
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A recession causes a decrease in the demand for housing, resulting in substantial layoffs in the construction industry. This is an example of
A) cyclical unemployment. B) frictional unemployment. C) seasonal unemployment. D) structural unemployment.
An increase in the price level in Japan relative to the price level in the United States would
a. increase U.S. net exports and increase aggregate demand. b. increase U.S. net exports and increase aggregate supply. c. reduce U.S. net exports and reduce aggregate demand. d. reduce U.S. net exports and increase aggregate demand.
The local bakery makes such great cinnamon rolls that consumers do not respond much at all to a change in the price. If the owner is only interested in increasing revenue, she should
a. lower the price of the cinnamon rolls. b. leave the price of the cinnamon rolls unchanged. c. raise the price of the cinnamon rolls. d. reduce costs.
Refer to the graph shown of average costs for a typical firm. The per-unit cost of the industry would be $8 if:
A. one firm produced 500 units of output. B. two firms produced 1,000 units of output each. C. one firm produced 667 units of output. D. two firms produced 250 units of output each.