The wage rate is the price of a unit of labor. What happens to the demand for labor if the wage rate increases?
A. It increases.
B. It decreases.
C. It does not change.
D. Uncertain-economic theory has no answer to this question.
Answer: C
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Unemployment increases when
A) an inflationary gap is created. B) potential GDP increases. C) the government decreases its expenditure on goods and services. D) aggregate demand increases. E) aggregate supply increases.
In the above figure, the marginal cost curve is curve
A) A. B) B. C) C. D) D.
Three hundred paper mills compete in the paper market. The total cost of production (in dollars) for each mill is given by the formula TC = 1,000Qmill + (Qmill)2, where Qmill indicates the mills annual production in thousands of tons. The marginal external cost of a mill's production (in dollars) is given by the formula MEC = 200 + 2Qmill. Finally, annual market demand (in thousands of tons) is given by the formula Qd = 200,000 - 100P. What is the efficient price?
A. $1,400 B. $1657.14 C. $685.71 D. $1,200
Suppose the U.S. Drug Enforcement Agency steps up its efforts to control the illegal importation of cocaine into the United States. What is the likely effect on the market for illegal drugs in the United States?
a. The price of cocaine and the quantity imported will both increase. b. The price of cocaine is likely increase and the quantity entering the country decrease. c. The price of marijuana, a cocaine substitute grown domestically, will fall. d. The policy will have the least impact on those individuals whose demand for drugs is elastic. e. Demand for drugs is highly inelastic and these policies have little or no effect on consumption.