The Lerner Index is derived from the profit-maximizing condition of a firm
Indicate whether the statement is true or false
True . Start out with MR = MC, realize that MR = P(1 + 1/e), and solve.
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To be officially classified as unemployed, a person must be
A) at least 18 and not working. B) laid off or fired. C) collecting unemployment benefits. D) at least 16, not working and actively seeking employment.
The efficiency wage model can be modified to allow real wages to vary over the business cycle by assuming that
A) workers' effort may depend on the unemployment rate and the real wage. B) during a recession, labor supply will decrease, reducing the efficiency wage. C) during a recession, productivity will fall, causing a reduction in the efficiency wage. D) during a boom, labor demand will increase, causing the efficiency wage to rise.
Liabilities of commercial banks show up on the Fed's balance sheet as part of its:
A. loans. B. foreign exchange reserves. C. liabilities. D. securities.
Suppose a powerful labor union negotiates a wage for its members above the equilibrium wage rate in a nonunionized market. A likely result of this is that:
A. The union will have difficulty recruiting new members B. Union members will be able to work more overtime than before C. This firm will make up for the higher wage rate by expanding output D. Not everyone who wants to work at the new wage will be able to find jobs