The supply of labor to the individual firm in a perfectly competitive market is
A) perfectly inelastic at the current equilibrium employment level.
B) perfectly elastic at the current market clearing wage rate.
C) downward sloping.
D) equal to the marginal revenue of output.
Answer: B
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Saving and taxes are considered leakages from the spending stream
a. True b. False
International trade under a floating exchange rate system
a. has been trouble-free owing to the stabilizing role of speculators in the currency markets. b. has suffered from so many problems that the volume of trade has declined significantly. c. exposes businesses to unavoidable risks when exchange rates change. d. has been subject to wild runs on currencies that were on the verge of devaluation.
If the recessionary GDP gap is $500, then the proper fiscal stimulus when faced with an upward-sloping AS curve is to
A. Shift the AS curve rightward by less than $500. B. Shift the AD curve rightward by $500. C. Shift the AD curve leftward by $500. D. Shift the AD curve rightward by more than $500.
Which of the following happens in the market for loanable funds when there is capital flight?
a. the demand curve shifts right. b. the demand curve shifts left. c. the supply curve shifts right. d. the supply curve shifts left.