For the monopolist,
A. diminishing returns to production and a falling product price as output increases causes the short-run demand curve for labor to be downward sloping.
B. an upward sloping marginal revenue curve causes its demand for labor to be downward sloping.
C. increasing returns to scale cause the short-run demand curve for labor to be downward sloping.
D. decreasing returns to scale cause the short-run demand curve for labor to be downward sloping.
Answer: A
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If aggregate supply rises sharply so that a recession occurs, then the prescription is for expansionary fiscal policy
Select whether the statement is true or false. A. True B. False
Correcting a market with an externality through taxation creates ________ total surplus compared to correcting it through a quota.
A. the same B. more C. less D. Any of these statements could be true depending on whether the tax is imposed on the buyer or seller.
If a union is successful in negotiating a wage rate which is above the market clearing wage, then which of the following would not occur?
A) The higher wages attract more workers leading to a shortage of jobs. B) Management may replace part of the workforce with machinery. C) To handle the surplus of labor the union will form a closed shop. D) The union may shift the supply of labor curve by developing methods to ration jobs.
Which of the following is a condition that helps enforce a cartel agreement?
A) a large number of firms B) relatively differentiated products C) easily observable prices D) large variation in prices