The labor supply curve facing an individual employer in a perfectly competitive labor market is:
A. upward sloping.
B. downward sloping.
C. horizontal.
D. the MRP curve.
Answer: C
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When the economy is operating at a level of real GDP that is greater than its potential level, we know that
A) the structural rate of unemployment is negative. B) the frictional unemployment is zero. C) the actual unemployment rate is greater than the natural rate of unemployment. D) the cyclical rate of unemployment is negative.
A decrease in government spending would cause all but one of the following to happen. Which is the exception?
a. The government's budget deficit would shrink. b. The interest rate would decrease. c. Consumption spending would increase. d. Investment spending would increase. e. Total output would decrease.
The condition in which an individual consumer's budget is exhausted and the last dollar spent on each good yields the same marginal utility is called ________ ________
a. marginal utility b. consumer surplus c. consumer equilibrium d. total utility
Debt is measured relative to GDP because:
A. as long as this ratio remains high, the government will have no trouble repaying the debt. B. GDP is always used as a reference point in economics. C. the ability of a country to pay off its debt depends on its productive capacity. D. the ability to produce output depends on the size of the nation's debt.