When workers earn below-subsistence wages in a free market economy, some workers will starve. As a result, the supply of labor curve will shift:
A. rightward, causing the wage to rise.
B. leftward, causing the wage to fall further.
C. leftward, causing the wage to rise.
D. rightward, causing the wage to fall further.
Answer: C
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If the fixed costs are relatively large, a relatively good approximation of the correct transfer price is
a. average costs b. average fixed costs c. average variable costs d. the market price
The owners of capital resources are compensated according to the
a. purchase price of the capital stock. b. marginal product of capital. c. value of the marginal product of capital. d. absolute level of production of final goods and services.
Which of the following goods is likely to have the most elastic demand curve?
A. Tobacco products. B. Gasoline. C. Medical care. D. Honda automobiles.
Suppose the Fed purchases $100 million of U.S. securities from security dealers. If the reserve requirement is 20 percent, the currency holdings of the public are unchanged, and banks have zero excess reserves both before and after the transaction, the total impact on the money supply will be a:
A. $100 million decrease in the money supply. B. $100 million increase in the money supply. C. $200 million increase in the money supply. D. $500 million increase in the money supply.