For which of the following goods are services are prices least sticky?
A. Taxi fares.
B. Haircuts.
C. Microwave ovens.
D. Airline tickets.
Answer: D
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According to the historical record of inflation since the 1300s, the inflation rate
A) became highest in the twentieth century. B) was at its lowest after Columbus arrived to America. C) was at its highest during the Industrial Revolution. D) has always been consistently high. E) was higher in the 1300s than in the 1900s.
Suppose that the equilibrium wage in the low-skilled labor market is $9.25. Further, suppose the federal government raises the minimum wage to $9.00 an hour from its present level of $8.15
The government's action of increasing the minimum wage will result in A) a decrease in unemployment. B) an increase in unemployment. C) a shortage of low-skilled labor. D) neither a shortage nor a surplus of labor in the low-skilled labor market.
Wendy spends $30 a week on movies and magazines. The price of a movie is $8, the price of a magazine is $2, and Wendy sees 3 movies a week and buys 3 magazines
The price of a magazine now increases to $4 and Wendy's brother gives her $6 a week so that she can still see 3 movies a week and buy 3 magazines. In this situation, Wendy will see ________ movies and buy ________ magazines. A) 3; 3 B) less than 3; less than 3 C) more than 3; fewer than 3 D) less than 3; more than 3
Is the profit-maximizing price-taking firm able to mark up price above the marginal costs of production at the profit-maximizing level of output? Why or why not?
What will be an ideal response?