The above figure shows the market for labor. The employer is a monopsony. If a minimum wage is set at $10 per hour, which of the following will occur?
A) The firm will pay $5 per hour.
B) The firm will pay $10 per hour.
C) The firm will pay $15 per hour.
D) The firm will hire less than 400 hours of labor.
B
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If two families are equally situated except that one rents and the other owns their home, the existing tax system will lead to
a. vertical inequity. b. equal treatment of both. c. horizontal inequity. d. equal burden sharing.
Which type of unemployment is most likely to help the economy become more efficient?
a. cyclical b. structural c. seasonal d. frictional e. underemployment
Suppose Larry's Lariats produces lassos in a factory, and uses nine feet of rope to make each lasso. The rope is put into a machine that automatically cuts it to the right length, then seals the ends to prevent fraying. The rope is then hand tied, dipped, and wound before being placed in a packaging machine to prepare it for retail sale. Which of the following would be considered a variable cost for this company?
A. Employee wages B. The cost of the factory C. The rope-cutting machine D. All of these expenses would be included in variable costs.
Other things being equal, an increase in the supply of money
A. reduces aggregate demand. B. increases the price level. C. reduces the amount of money balances. D. generates significant changes in relative prices.