A firm that is a monopsonist in the labor market and a monopolist in the product market will hire labor to the point at which
A. a perfectly inelastic labor supply = perfectly inelastic labor demand.
B. a perfectly elastic labor supply = MRP.
C. MFC = MRPm.
D. where supply of labor = demand for labor.
Answer: C
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During the Clinton administration,
a. government savings rose significantly. b. total savings savings rose significantly. c. private savings rose because an increase in the tax rates on upper-income Americans and more government regulation d. both b and c.
When market failure occurs, the role of government is to
A. Do nothing. B. Eliminate markets. C. Push market outcomes closer to the ideal. D. Create an alternative to markets.
The income effect of a higher real wage on the quantity of labor supply is the
A. tendency of workers to supply less labor in response to becoming wealthier. B. idea that workers feel psychologically wealthier when wages are higher, so they work more. C. effect that income must rise when wages rise. D. tendency of workers to supply more labor in response to becoming wealthier.
Increases in inflation redistribute resources from ________-spending to ________-spending households and hence, ________ short-run equilibrium output.
A. high; low; increase B. low; high; increase C. low; high; decrease D. high; low; decrease