The wage rate is the price of a unit of labor. What happens to the quantity of labor supplied 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: A
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The four parts of the business cycle occur in the following order
A) recession, trough, peak, expansion. B) expansion, trough, peak, recession. C) recession, trough, expansion, peak. D) expansion, trough, recession, peak.
Assume a closed economy with fixed taxes and the marginal propensity to consume is equal to 0.9. What is the government spending multiplier?
A) 10 B) 9 C) 5 D) 1
One reason firms in monopolistic competition can charge different prices is that their products are
a. identical. b. similar. c. differentiated. d. guaranteed.
A small country is considering imposing a tariff on imported wine at the rate of $5 per bottle. Economists have estimated the following based on this tariff amount: World price of wine (free trade):$20 per bottleDomestic production (free trade):500,000 bottlesDomestic production (after tariff):600,000 bottlesDomestic consumption (free trade):750,000 bottlesDomestic consumption (after tariff):650,000 bottles The production effect of the tariff on wine is worth about
A. $250,000. B. $2.75 million. C. $500,000. D. $2.5 million.