The United Auto Workers bargained for higher wages and more benefits for autoworkers. As a result of the higher wages and increased benefits,
i. the quantity of new automobiles supplied decreases.
ii. the supply of new automobiles decreases.
iii. the supply of new automobiles increases.
A) only i
B) only ii
C) only iii
D) both i and ii
E) Neither i, ii, nor iii is correct.
B
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Suppose over the next several years the productivity of firms producing electric cars improves dramatically. The advance in productivity leads to
A) a decrease in the supply of electric cars so that the supply curve shifts rightward. B) an increase in the supply electric cars so that the supply curve shifts rightward. C) an increase in the supply of electric cars so that the supply curve shifts leftward. D) a decrease in the supply of electric cars so that the supply curve shifts leftward. E) no change in the supply of electric cars, only a change in the quantity supplied of electric cars.
The long run: a. is a period long enough for every input except plant size to be varied. b. is a period in which there are no fixed costs
c. is typically a period of two years. d. is all of the above.
Under perfect competition, the market mechanism, without any government regulation, is capable of
a. allocating resources efficiently. b. solving equity problems. c. making the average cost of labor equal to the average cost of all commodities. d. making more income available to the poor.
Assume that Country X and Country Y are trading partners and the exchange rates are fixed. If prices in Country Y fall, which of the following is expected to happen?
a. Country X will export more. b. Economy of Country X will be depressed. c. Net exports will rise for Country X. d. Country Y will import more.