The preceding table gives monthly production information for Peter's Peanuts, a firm in a perfectly competitive industry. An increase in the wage rate for labor leads to
A) an increase in the quantity of labor demanded.
B) a decrease in the quantity of labor demanded.
C) an increase in the demand for labor.
D) a decrease in the demand for labor.
B
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The economic analysis of extending the duration of unemployment benefits to 99 weeks involves both positive and normative analysis. Consider the following consequences of extending the duration of unemployment benefits:
a. Extending the duration of unemployment benefits to 99 weeks will create less incentive for some unemployed workers to seek employment. b. Extending the duration of unemployment benefits to 99 weeks will increase the total amount of government expenditure on unemployment benefits. c. The benefits received by those collecting unemployment benefits should be valued more highly than the increase in government expenditure needed to pay the benefits. d. By extending the duration of unemployment benefits to 99 weeks, the unemployed will have more time to acquire new skills before reentering the workforce. Which of the consequences above are positive statements and which are normative statements? A) a and b are positive statements; c and d are normative statements. B) Only b is a positive statement; a, c, and d are normative statements. C) a and d are positive statements; b and c are normative statements. D) a, b, and d, are positive statements; only c is a normative statement.
In the markets for factors of production in the circular-flow diagram,
a. households provide firms with labor, land, and capital. b. households provide firms with savings for investment. c. firms provide households with goods and services. d. firms provide households with revenue.
An upward-sloping labor-supply curve implies that an increase in the wage induces
a. firms to increase the quantity of labor they hire. b. firms to increase the quantity of output they produce. c. workers to decrease the quantity of leisure they enjoy. d. All of the above are correct.
Normal Good
What will be an ideal response?