Buyers and sellers acting in their own best interest generate outcomes that are in society's best interest when all of the following are true except:
A. buyers and sellers are informed.
B. markets are inefficient.
C. there are no external benefits.
D. there are no external costs.
Answer: B
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Demand is inelastic if the price elasticity of demand is
a. less than 1. b. equal to 1. c. greater than 1. d. equal to 0.
If marginal cost exceeds average total cost:
A. average variable cost increases as output increases. B. average variable cost decreases as output increases. C. average total cost decreases as output increases. D. average fixed cost increases as output increases.
Consider the accompanying figure representing the labor market below. Suppose the government passes a minimum wage requiring employers to pay at least $8.00 per hour.
Prior to the imposition of the minimum wage, employer surplus is ________ per day, and after the imposition of the minimum wage, employer surplus is ________ per day.
A. $18,000; $2,000 B. $18,000; $14,000 C. $9,000; $5,000 D. $9,000; $1,000
If the aggregate supply curve is vertical, then the short-run Phillips curve will
A. be horizontal. B. also be vertical. C. slope upward. D. slope downward.