If firms seek an average markup of 25% over labor costs, and this is consistent with labor demands at the natural rate, then in the long run
a) real wages will be 25% of the price level
b) prices will be 4 times greater than wages
c) wages will rise 80 cents for every $1 increase in prices
d) wages will fall 25 cents for every $1 increase in prices
e) prices will rise 25 cents for every $1 increase in wages
c) wages will rise 80 cents for every $1 increase in prices
You might also like to view...
The structure of a firm can fail in similar ways to market failure
Indicate whether the statement is true or false
Country A had a population of 2,000, of whom 1,300 worked an average of 8 hours a day and had a productivity of 5 . Country B had a population of 2,500, of whom 1,700 worked 8 hours a day and had productivity of 4 . Country
a. A had the higher level of real GDP and real GDP per person. b. A had the higher level of real GDP and Country B had the higher level of real GDP per person c. B had the higher level of real GDP and Country A had the higher level of real GDP per person d. B had the higher level of real GDP and real GDP per person.
Refer to the graph shown that depicts a third-party payer market for prescription drugs. What happens to total expenditures in this market if a $2 co-pay is established compared to a free-market equilibrium?
A. Expenditures fall by $120 B. Expenditures rise to $270 C. Expenditures remain at $120 D. Expenditures rise to $240
Suppose that the percentage change in demand is 20%, the price elasticity of demand is 3, and the percentage change in the equilibrium price is 4%. What is the price elasticity of supply?
A. 0 B. 2 C. 4 D. 5