"The market demand curve for labor is the horizontal summation of the labor demand curves of all firms." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. A reduction in the wage rate causes each firm to move down their demand curves for labor and hire more workers. Industry output increases, which means product price falls. The fall in the product price causes the individual firm's demand curve for labor to shift to the left. The market demand curve for labor reflects not only the shape of the individual demand curves, but also this shift in the MRP curve.
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If, in the market for money, the quantity of money demanded exceeds the money supply, the interest rate will
A. fall, causing households and businesses to hold more money. B. rise, causing households and businesses to hold more money. C. fall, causing households and businesses to hold less money. D. rise, causing households and businesses to hold less money.
________ involves undertaking an activity until its marginal benefits equal marginal costs
A) Market intervention B) Scarcity reduction C) Central planning D) Marginal analysis
To maximize sales revenue, an oligopoly will expand output until the price is zero
a. True b. False Indicate whether the statement is true or false
A World View article, "The Female 'Inequality Trap,'" says that in many poor nations the "… returns on female human capital investment is low." When women are not allowed to work outside the home or to receive an education, this is referred to as
A. An inequality trap. B. A justice gap. C. A productivity trap. D. A prejudice gap.