Assume that the labor market for auto mechanics is initially in equilibrium. Which of the following would lead to an increase in both the wage rate and employment for auto mechanics?
a. a decrease in the price of a substitutable input
b. a decrease in the price of a complementary input
c. an increase in training costs for auto mechanics
d. a decrease in wages in an alternate labor market
e. a decrease in demand for the output of firms employing auto mechanics
B
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10% of the total food grains produced in a country during a year got damaged due to poor storage. Which of the following will happen in this case?
A) Imports will fall. B) Trade surplus will increase. C) GDP will remain unchanged. D) GDP will decrease.
The production of a good or service by an authority that receives the most of its revenue from the government is referred to as
A) public provision. B) private subsidies. C) vouchers. D) copyrights. E) Coasian production.
The economy experiences both inflation and unemployment when
A. aggregate demand decreases and aggregate supply remains unchanged. B. aggregate demand increases and aggregate supply decreases. C. aggregate demand decreases and aggregate supply increases. D. aggregate supply decreases and aggregate demand remains unchanged.
New Keynesian economics assumes rational expectations, flexible wages, and flexible prices.
Answer the following statement true (T) or false (F)