The price level is a
a. relative variable.
b. dichotomous variable
c. real variable.
d. nominal variable.
d
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Refer to Figure 4-13 which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded, and quantity exchanged?
What will be an ideal response?
The supply curve of a perfectly competitive firm in the short run is
A) the portion of the firm's marginal cost curve above the minimum point of the average total cost curve. B) the firm's average variable cost curve. C) the portion of the firm's marginal cost curve above the minimum point of the average variable cost curve. D) the portion of the firm's marginal cost curve below the minimum point of the average variable cost curve.
If a firm in a perfectly competitive market faces the curves in the graph shown and observes a market price of $16, the firm:
A. can make positive profits by producing less than 43 units.
B. can make positive profits by producing where MC = MR.
C. cannot make positive profits and should shut down in the short run.
D. should continue to operate in the short run, but plan to exit in the long run.
Supporters of minimum-wage legislation argue that:
A. workers deserve a basic standard of living. B. it should be set below the market equilibrium wage. C. some workers will become unemployed as a result of the minimum wage. D. All of these are true.