The output effect of an increase in the wage comes about because higher wages:
A. increase production costs, and final good prices will rise, reducing the quantity demanded of the product.
B. increase production costs, and final good prices will rise, increasing the quantity demanded of the product.
C. make labor less expensive as an input, leading firms to switch to labor as an input.
D. make labor more expensive as an input, leading firms to switch to other inputs.
Answer: A
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What do economists mean by the phrase "sunk costs are sunk"?
a. Sunk costs are irretrievable, but they do lower profits and thus affect the firm's output level. b. Sunk costs are a primary reason why marginal costs tend to increase. c. Sunk costs cannot be recovered and are irrelevant to future decision making. d. Sunk costs lower consumer welfare, because producers "pass on" these costs in the form of higher prices.
The __________ of the mentally ill over the last two and a half decades, without the promised halfway houses to treat and shelter them has added to the ________________.
Fill in the blank(s) with the appropriate word(s).
Amy can produce either 5,000 pounds of cheese or 20 cars per year. Mike can produce either 5,000 pounds of cheese or 10 cars per year. Mike's opportunity cost of producing one car is ________ pound(s) of cheese.
A. 250 B. 1/250 C. 500 D. 1/20
If the population of a country is 250,000 people, its labor force consists of 145,000 people, 35,000 people are unemployed, 10,000 are unable to work, and 5,000 are unwilling to work, the unemployment rate is
A. 24.1 percent. B. 22.1 percent. C. 19.4 percent. D. 14.0 percent.