Suppose that the price elasticity of supply is 0.5 and the price increases by 4%. We would predict:
A. an 8% increase in quantity supplied.
B. a 2% increase in quantity supplied.
C. a 0.8% increase in quantity supplied.
D. a 0.2% increase in quantity supplied.
Answer: B
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The above figure shows the labor market in an undeveloped nation. A minimum wage has an effect on the market for low-skilled labor if it is set at
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In the equation Y = (1/1 – b + v)(a + I + G + X ? u), the term (1/1 – b + v) is referred to as the
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