In 2015, President Obama proposed increasing the minimum wage from $7.25/hr to $10.10/hr. According to theory, what would likely be the result of such an increase?
A. Unemployment would increase as firms lay off workers.
B. Firms would hire more workers.
C. All workers prior to the wage increase would now earn at least $10.10 per hour.
D. Some workers would leave the labor market.
Answer: A
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The federal funds rate
A) is determined directly by firm demand for funds. B) is determined administratively by the Fed. C) is determined directly by household demand for funds. D) is determined by the supply of and demand for bank reserves.
As the price of ballpoint pens increases, the demand for felt-tip pens can be expected to decrease
a. True b. False
Some firms eventually experience problems with their capacity to produce output as their output levels increase. For these firms,
a. market power is substantial. b. supply is perfectly inelastic. c. supply is more elastic at low levels of output and less elastic at high levels of output. d. supply is less elastic at low levels of output and more elastic at high levels of output.
Recall the Application about the benefits provided by the LoJack auto recovery system to answer the following question(s).Recall the Application. LoJack is system that allows the police to track stolen cars. Car owners who do not buy LoJack systems still benefit because:
A. the owner of a LoJack system gets a break on his auto theft insurance. B. the owners of LoJack earn profits. C. thieves don't know which cars have LoJack. D. All of these