Susan is a plant manager in charge of a factory in a relatively poor country. Even though market wages are low, she decides to raise the wages of her workers. Her decision
a. might increase profits if it means that the wage is high enough for her workers to eat a nutritious diet that makes them more productive.
b. will help eliminate the excess supply of labor.
c. may cause her workers to reduce the effort they expend at their jobs.
d. All of the above are correct.
Answer: a. might increase profits if it means that the wage is high enough for her workers to eat a nutritious diet that makes them more productive.
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If the total variable cost curve for a firm is S-shaped, what is the shape of the total cost curve for that firm?
a. U-shaped b. Flat. c. Hill-shaped. d. S-shaped. e. There is not enough information.
In the money market, if the money supply decreases, the opportunity cost of holding money: a. decreases and the quantity of money demanded increases
b. decreases and the quantity of money demanded falls. c. increases and the quantity of money demanded falls. d. increases but the quantity of money demanded remains unchanged. e. increases and the quantity of money demanded also increases.
If net exports is a negative number for a particular year, then
a. the value of firms' inventories declined over the course of the year. b. consumption exceeded the sum of investment and government purchases during the year. c. the value of goods sold to foreigners exceeded the value of foreign goods purchased during the year. d. the value of foreign goods purchased exceeded the value of goods sold to foreigners during the year.
The downward sloping aggregate demand curve can be explained in part through the:
A. wealth effect. B. negative relationship between the price level and investment spending. C. negative relationship between the price level and net exports. D. All of these are true.