If wage falls below the rate determined by the market equilibrium, in which direction will it move and why?
When the wage rate falls below the equilibrium rate, it creates an excess demand for labor which will push the wage back toward the equilibrium.
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In the Boeing/Airbus oligopoly example discussed in the text, why did Boeing and Airbus have an incentive to produce more planes than the monopoly outcome?
What will be an ideal response?
Which of the following would be a deadweight loss from a tariff?
A) The shift of consumer surplus to government B) The increase in producer surplus C) The decrease in consumer surplus D) The decrease in consumer surplus due to a drop in consumption E) All of the above.
Suppose there are 1000 identical wheat farmers. For each, TC = 10 + q2. Derive the market supply curve
What will be an ideal response?
Government redistribution of income in response to individuals free riding on the charity of others is a Pareto superior move
a. True b. False