Suppose the market for autoworkers is initially in equilibrium, but then the demand for automobiles increases and simultaneously the automakers allow autoworkers less flexibility working at the plants. What happens in the market for autoworkers?
A) The equilibrium wage rate will increase and the equilibrium quantity of labor will increase, decrease or stay the same.
B) The equilibrium wage rate will increase, decrease or stay the same and the equilibrium quantity of labor will increase.
C) The equilibrium wage rate and the equilibrium quantity of labor will both decrease.
D) The equilibrium wage rate will decrease and the equilibrium quantity of labor will increase.
Answer: A
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The above figure shows the demand curve for movie rentals from Redbox. If Redbox lowered its price from $4.00 to $3.50, then total revenue would ________ because demand is ________
A) decrease; elastic B) increase; elastic C) decrease; inelastic D) increase; inelastic
Does the principle of optimization imply that people always make the best choices?
What will be an ideal response?
When looking at this graph for the welfare effects of a subsidy, the location of the supply curve above the demand curve for each unit produced between Q1 and Q2 ______.
a. prevents the producers from being able to make enough goods to meet demand b. prevents the development of a deadweight loss associated with the subsidy c. shows that the cost of producing those units is lower than the marginal benefits to consumers d. shows that the marginal benefits to consumers are less than society’s cost of producing those units
If the diagram were relevant to an individual firm, we could conclude that the firm is:
A. a pure competitor in the hire of labor.
B. a monopsonist in the hire of labor.
C. selling its product in an imperfectly competitive market.
D. selling its product in a purely competitive market.