Refer to Figure 6-5. The section of the demand curve labeled "A" represents
A) the inelastic section of the demand curve.
B) the unit-elastic section of the demand curve.
C) the perfectly elastic section of the demand curve.
D) the elastic section of the demand curve.
D
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The above figure shows the market for labor. The employer is a monopsony. If a minimum wage is set at $10 per hour, which of the following will occur?
A) The firm will pay $5 per hour. B) The firm will pay $10 per hour. C) The firm will pay $15 per hour. D) The firm will hire less than 400 hours of labor.
Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. Based on their production possibilities frontiers, Tom and Jerry:
A. can both benefit from trade because absolute advantage exists. B. could both benefit from trade because comparative advantage exists. C. cannot benefit from trade because Tom has the absolute advantage in both goods. D. will not decide to trade because no comparative advantage exists.
In an effort to balance the budget, the government cuts spending rather than increasing taxes. What will happen to the consumption schedule?
A. It will become steeper. B. It will become flatter. C. It will shift upward. D. It will shift downward. E. It will remain the same and move along it.
A monopolist has four distinct groups of customers. Group A has an elasticity of demand of 0.8, B has an elasticity of demand of 0.9, C has an elasticity of demand of 1.0, and D has an elasticity of demand of 1.2. The group paying the highest price for the product will be
A. A. B. B. C. C. D. D.