The minimum wage is a
A. price ceiling.
B. cost ceiling.
C. positive externality.
D. price floor.
Answer: D
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
When the growth rates of actual and potential GDP diverge, they usually diverge because
A. actual GDP growth equals potential GDP growth. B. actual GDP growth falls below potential GDP growth. C. potential GDP growth rates fall below actual GDP growth rates. D. potential GDP growth rates fluctuate while actual GDP growth rates remain stable.
Which of the following is most likely to be predicted by the Heckscher-Ohlin theory?
A. The wage rate of the low-skilled workers will be higher in the developing countries than in the developed countries. B. The industrialized nations will mainly export labor-intensive goods. C. Countries like China will completely specialize in the production of primary products. D. The developing countries will mainly export labor-intensive goods.
It takes many years to train to become an orthopedic surgeon. This suggests that, in the short run, a sudden increase in the demand for orthopedic surgeons will:
A. lead to a large increase in the number of orthopedic surgeons. B. have no impact on the number of people who decide to become orthopedic surgeons. C. not affect the salaries of orthopedic surgeons. D. have little effect on the number of trained orthopedic surgeons.