Suppose there are 100 firms in a market and all are identical. Firm A will hire 20 workers when the wage rate is $10, 25 workers when the wage rate is $9, and 30 workers when the wage rate is $8. The equilibrium wage rate for a number of years has been $9. If the wage rate falls to $8, we know that
A. the quantity demanded for the market will increase to more than 3,000 workers.
B. the quantity demanded for the market will increase to less than 3,000 workers.
C. the quantity demanded for the market will increase to 3,000 workers.
D. the quantity demanded for the market will increase, but we can't tell which of these answers is correct.
Answer: C
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The principle of comparative advantage was first explained by David Ricardo in the early 1800s.
Answer the following statement true (T) or false (F)
Let MC be the marginal private cost per megawatt hour (Mwh) of producing electricity using coal. Let MSC be the marginal social cost per Mwh and T be the tax per Mwh. To achieve efficiency, the tax should be set so that
A) MC = MSC + T. B) MSC = MC + T. C) MC + MSC = T D) MC = T.
When oligopolists join together in a cartel, they
A. have chosen to ignore interdependence. B. have admitted that their behavior is interdependent. C. are planning to violate the law of supply and demand. D. are trying to behave like perfect competitors.
Unions can increase labor productivity by
A) maximizing the number of workers in the union. B) reducing the supply of workers over time. C) reducing conflicts between workers and management. D) reducing the quantity of poorly made imports into the country.