What would a person do if the market wage is less than his or her reservation wage?
A. The person will be unemployed.
B. The person will enter the labor market.
C. The person will work more hours as the wage falls further.
D. The person will work as much as possible.
E. The person will not participate in the labor force.
Answer: E
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An increase in input prices will cause
A) supply to shift rightward, equilibrium price to rise, and equilibrium quantity to fall. B) supply to shift leftward, equilibrium price to rise, and equilibrium quantity to fall. C) supply to shift rightward, equilibrium price to fall, and equilibrium quantity to rise. D) supply to shift leftward, equilibrium price to fall , and equilibrium quantity to rise.
One of the reasons communism failed was because:
a. governments ran out of money. b. workers received the same pay whether or not they worked hard. c. there was no unemployment. d. Mao Zedong passed away. e. technological improvements were impossible in a communist economy.
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. cannot benefit from trade because Tom has the absolute advantage in both goods. C. could both benefit from trade because comparative advantage exists. D. will not decide to trade because no comparative advantage exists.
The ABC Computer Company spends a lot of money for advertising designed to convince you that their personal computers are superior to all other personal computers. If the ABC Company is successful, the demand for ABC personal computers
A. and the demand for other firms? personal computers will become more price elastic. B. will become less price elastic, but the demand for other firms? personal computers will become more price elastic. C. and the demand for other firms? personal computers will become less price elastic. D. will become more price elastic, but the demand for other firms? personal computers will become less price elastic.