If the quantity of labor supplied increases by 5 percent when the wage increases by 10 percent, the elasticity of labor supply is:
A. 5.
B. 2.
C. 1/2.
D. 1/5.
Answer: C
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The number of people looking to buy ceiling fans increases, so there is an increase in the
A) quantity of ceiling fans demanded and a surplus of ceiling fans. B) demand for ceiling fans and a rise in the price of a ceiling fan. C) demand for ceiling fans and a surplus of ceiling fans. D) supply of ceiling fans and no change in the price of a ceiling fan. E) demand for ceiling fans and in the supply of ceiling fans.
An increase in the relative price of a good cannot be caused by
A) an increase in the nominal price of the good that is greater than the increase in the nominal price of the other good. B) a decrease in the nominal price of the good that is less than the decrease in the nominal price of the other good. C) a decrease in the nominal price of the other good while the price of the good itself remains constant. D) an increase in the nominal price of the other good while the price of the good itself remains constant.
A monopolist finds out that if he lowers his price from $10 to $8, sales rise from 100 units to 115 units. Therefore, in this price range,
a. marginal revenue is positive. b. marginal revenue is negative. c. the price elasticity of demand is greater than one. d. both a and c are correct.
Ceteris paribus, which of the following is most likely to cause an increase in the quantity supplied of perfume?
A. An improvement in perfume-making technology. B. An increase in the price of perfume. C. An increase in the number of sellers of perfume. D. An increase in the salaries paid to perfume makers.