The United States' price system is __________ by both price ceilings and price floors.
A. affected
B. efficient
C. unaffected
D. None of these choices are correct.
A. affected
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The price of cereal rises. As a result, people have cereal for breakfast on fewer days and eat eggs instead. This behavior is an example of
A) a decrease in the quantity demanded of cereal because of the substitution effect. B) an increase in the quantity demanded of eggs because of the income effect. C) a decrease in the quantity supplied of cereal because of the substitution effect. D) an increase in the quantity supplied of eggs because of the income effect.
When the labor force is constant and unemployment is at its natural rate,
A) (the rate of job finding × the number of unemployed workers) = (the rate of job separation × the number of employed workers). B) (the rate of job finding × the number of employed workers) = (the rate of job separation × the number of unemployed workers). C) (the rate of job finding × the rate of job separation) = (the number of unemployed workers × the number of employed workers). D) (the rate of job finding + the rate of job separation) = (the number of unemployed workers + the number of employed workers).
It is profitable to hire labor so long as the:
A. MPL is less than wage. B. VMPL is less than wage. C. VMPL is greater than wage. D. MPL is greater than wage.
Using the HO model, assume that the United States is capital abundant and Mexico is labor abundant. If soybeans are capital intensive and avocados are labor intensive, it would be reasonable to expect the United States to
A) specialize completely in soybean production. B) specialize completely in avocado production. C) increase soybean production, but still produce some avocados. D) increase avocado production, but still produce some soybeans.