According to the output effect, a decrease in the wage will decrease production costs, so the price of final goods will decrease and the demand for labor will decrease.
Answer the following statement true (T) or false (F)
False
You might also like to view...
Differentiate between perfectly elastic supply and perfectly inelastic supply. When the price of a good is $100, 50 units are supplied. When the price increases to $300, 250 units are supplied. Calculate the price elasticity of supply of the good
What will be an ideal response?
A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer
What will be an ideal response?
In a model with money neutrality, a 10% increase in the money supply leads to an increase of output by
A) more than 10%. B) 10%. C) less than 10%, but more than zero. D) zero.
?
In Exhibit 3-15, if the market price of good X is initially $1.50, a movement toward equilibrium requires:
A. no change, because an equilibrium already exists. B. the price to fall below $1.50 and both the quantity supplied and the quantity demanded to fall. C. the price to remain the same, but the supply curve to shift to the left. D. the price to fall below $1.50, the quantity supplied to fall, and the quantity demanded to rise.