A minimum wage that is above the equilibrium wage rate
A) increases efficiency within the labor market.
B) increases the quantity of labor demanded.
C) creates a deadweight loss.
D) has no effect on the labor market because it is set above the equilibrium wage rate.
E) None of the above answers is correct.
C
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Suppose the firms in a monopolistically competitive market are earning positive economic profits. What will happen to move the market to its long-run equilibrium?
A) The firms' demand curves will become less elastic. B) The demand curves faced by firms in the market will shift to the right. C) More close substitutes will appear in the market. D) Some firms will exit the market if they can't cover all of their fixed and variable costs.
When a new good enters the market, the CPI
a. accounts for the change in its price immediately. b. fails to account for the impact on living standards from the good's existence. c. never accounts for how the good changes in price. d. accounts for the decline in the price but not for any increases. e. accounts for the good only if sold in populous eastern states.
Which of the following statements regarding a competitive market is not correct?
a. There are many buyers and many sellers in the market. b. Because of firm location or product differences, some firms can charge a higher price than other firms and still maintain their sales volume. c. Price and average revenue are equal. d. Price and marginal revenue are equal.
Inventory levels unexpectedly fall and as a result firms increase the quantity of goods and services they produce. Which of the following is consistent with these two occurrences?
A) TP is greater than TE. B) TP is less than TE. C) TE is equal to TP minus the rise in inventories above the optimum inventory level. D) TP is equal to TE. E) b and c