Explain what effect a reduction in the unemployment rate will have on the real wage based on: (1 ) the WS relation; and (2 ) the PS relation
What will be an ideal response?
A reduction in the unemployment rate will increase bargaining power, increase the nominal wage, and therefore increase the real wage based on wage setting behavior. Changes in the unemployment rate have no effect on the real wage based on price setting behavior.
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Mountain Water is a natural monopoly. The government decides to regulate Mountain Water by imposing a marginal cost pricing rule. The figure above shows the demand for Mountain Water. Marginal cost is $0.20 per bottle
The price of a bottle of Mountain Water is ________, and ________ thousand bottles are sold per month. A) $0.20; 400 B) $0.50; 250 C) $0.20; 500 D) $1.00; 500
What is the economic criterion most often used to compare living standards among countries?
a. real GDP b. unemployment rate c. incidence of AIDS d. rate of population growth e. real per capita GDP
Instead of a uniform standard, suppose each firm faces a volume-based, marginal effluent fee (MEF) of $90. How much will each firm abate?
Among the identified point sources contributing to the pollution of Puget Sound are Dow Chemical (D) and Chevron (C). Each firm's cost functions are shown below. MACD = 2.5AD MACC = 3.75AC TACD = 1.25AD2 TACC = 1.875AC2 To meet the effluent limits under the Clean Water Act, each firm has an NPDES permit to release some fixed amount of effluents, so each must abate 30 units.
The negative slope of the demand curve reflects the:
A. positive relationship between price and quantity. B. proportional relationship between price and quantity. C. inverse relationship between price and quantity. D. inverse relationship between income and quantity.