An employer faces a higher minimum wage control where it cannot pay its workers any less than $10.25 an hour. The employer may react by
a. Doing nothing-it cannot violate the regulation
b. Offering the employees fewer fringe benefits
c. Increasing spending on workplace amenities
d. Hiring additional workers
b
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A decrease in the personal income tax rate ________ disposable income which ________ consumption
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
In the liquidity trap, monetary policy
A) has a large impact on interest rates. B) has a small impact on interest rates. C) has no impact on interest rates. D) has a proportionate impact on interest rates.
Requiring that barbers have licenses, restricts entry and
A) raises the average quality of hair cuts. B) increases the costs of getting a hair cut. C) may increase or decrease welfare. D) All of the above.
Product differentiation:
a. is carried out by both perfectly competitive and monopolistically competitive firms. b. is succesful if a firm faces a relatively inelastic demand curve. c. does not allow the firm to raise its price without losing all of its customers. d. cannot be accomplished through advertising or trivial product changes. e. if carried out successfully enables the firms to enjoy market power.