The real wage will rise if the nominal wage
A. increases more rapidly than the prices of the goods and services it buys.
B. falls at the same rate as the general price level.
C. falls more rapidly than the prices of the goods and services it buys.
D. increases at the same rate as labor productivity.
Answer: A
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The figure above shows a production possibilities frontier. In the figure, when the economy moves from point D to point C, the opportunity cost of producing one more DVD ________, and when it moves from point C to D, the opportunity cost of producing
one more cell phone ________. A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases E) increases; remains the same
Managers should attempt to maximize market share
Indicate whether the statement is true or false
The law of one price (LOOP) indicates that:
a. The price of a good in one country should be equal to the exchange-rate-adjusted price of the same product in another country. b. The nominal wage rate in one country should be equal to the exchange-rate-adjusted wage of the average laborer in another country. c. All the above. d. None of the above. e. Nominal interest rates in countries should be identical because if they were not, arbitragers could make risk-free profits.
Smith argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Smith is
A) advancing the foreign export subsidies argument for protectionism. B) making the mistake of believing that high wages mean high costs. C) advancing the antidumping argument for protectionism. D) making the mistake of believing that productivity is higher in foreign countries than in the United States. E) none of the above