How does a profit-maximizing firm that is operating in a competitive labor market respond to an increase in the wage rate?
A. The firm will demand more labor due to the substitution effect.
B. The firm will produce less output due to the scale effect.
C. The firm will demand less capital due to the substitution effect.
D. The firm will demand more capital due to the scale effect.
E. The firm will demand more labor due to the scale effect.
Answer: B
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Given that the demand for unskilled labor curve is downward-sloping, an unintended effect of raising the minimum wage is that some people who worked at the lower wage will lose their jobs at the higher wage
Indicate whether the statement is true or false
In 2014, the fraction of families living in poverty that were headed by single mothers of children under age 18 is
A. 34%. B. 22%. C. 68%. D. 45%.
A firm uses workers, land, and machinery for its production process. Which of the following statements is then true?
A) The only way the firm can change its output level in the long run is by changing the number of workers. B) The only way the firm can change its output level in the long run is by changing the amount of land it owns. C) The only way the firm can change its output level in the long run is by changing the amount of machinery. D) The firm can change its output level in the long run by changing any or all of its three inputs.
The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy is open to trade, and the world price of a car is $6,000, how many cars will be imported?
A. 2,000 B. 6,000 C. 3,000 D. 4,000