An increase in the price of IBM personal computers is likely to
A. decrease the demand for IBM computers.
B. increase the demand for Apple computers (Macs).
C. increase the demand for IBM computers.
D. decrease the demand for Apple computers (Macs).
B. increase the demand for Apple computers (Macs).
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A study of the effects of the minimum wage on employment of low-skilled workers estimated the price elasticity of demand for low-skilled workers is -0.75
Suppose that the government is considering raising the minimum wage from $7.25 per hour to $7.75 per hour. Based on this information, calculate the percentage change in the employment of low skilled workers. Use the midpoint formula.
The Fed engages in open market operations and sells government securities. The result is
A) lower interest rates. B) higher interest rates. C) interest rates remain unchanged since there is no reason to think bond prices changed. D) uncertain since more information is needed.
A consumer allocates his budget according to rules of utility maximization
What are the rules of utility maximization and how do they explain the paradox of value, which is that diamonds are expensive but useless, while water is inexpensive but essential?
Use the above table. Assuming constant opportunity costs, if countries Alpha and Beta specialize based on comparative advantage, then
A) Alpha should specialize in knives and Beta should specialize in forks. B) Alpha should specialize in forks and Beta should specialize in knives. C) Alpha should specialize in producing both items. D) Beta should produce both items.