Labor demand is less elastic when:
A. the inputs that could be substituted for labor are relatively inexpensive.
B. a large amount of labor is essential to the production process.
C. there are many substitutes for labor in the production process.
D. the demand for output is more elastic.
Answer: B
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Suppose scientific research generates external benefits. Without government intervention, the market for scientific research would
A) produce the efficient amount. B) produce more than the efficient amount. C) produce some research, but less than the efficient amount. D) produce zero research. E) either produce more than or less than the efficient amount depending on whether the external benefit is on the production or consumption of the research.
The banking system has just experienced an increase in deposits of $50,000. The currency drain ratio is 20 percent and the desired reserve ratio is 10 percent. What does the money multiplier equal?
A) 4.00 B) 3.33 C) 0.25 D) 10.00
An increase in the wages paid to fishermen will have what effect on the fish market equilibrium?
a. Price will decrease, and quantity will decrease. b. Price will increase, and quantity will increase. c. Price will decrease, and quantity will increase. d. Price will increase, and quantity will decrease. e. Price and quantity will stay the same.
Which of the following correctly describes the aggregate supply curve?
a. A curve that shows the level of real GDP demanded at different possible price levels. b. A curve that shows the level of real GDP produced at different possible price levels. c. A curve that shows the level of quantity supplied by firms in a market at different possible prices, such as the supply of oranges in the oranges market. d. None of the above.