The effect of legislation establishing a minimum wage above the market clearing wage is
A) unemployment.
B) a shortage of labor.
C) higher wages for all workers.
D) a shift of the demand for labor curve.
Answer: A
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Policy makers who believe that the costs of inflation are very high will tend to favor which of the following during an inflationary gap?
a. moderate fiscal stimulus, no monetary stimulus b. fiscal and monetary tightness c. moderate monetary stimulus, fiscal tightness d. strong fiscal and monetary stimulus
Suppose the production function is given by Q = 2K + 5L. What is the marginal product of labor when 15 units of capital and 10 units of labor are employed?
A. 2 B. 50 C. 5 D. 25
Suppose a city has 20 citizens. The first 10 citizens each derive marginal benefit from traffic lights according to the function MB = 10 - Q, and the remaining 10 citizens each derive marginal benefit from traffic lights according to the function MB = 20 - Q. If traffic lights cost $20 each to produce, what is the efficient quantity of traffic lights?
A) 14 traffic lights B) 16 traffic lights C) 12 traffic lights D) 9 traffic lights
An example of a nominal variable is ________
A) income measured at current market prices B) expenditures in terms of the quantities of actual goods C) the chain weighted measure of GDP D) all of the above E) none of the above