What does it mean for a firm to be a price taker in the labor market?
What will be an ideal response?
A price taker in the labor market can hire as many workers as it wants without having to offer a higher wage. The supply curve of labor faced by the individual firm is horizontal at the market wage.
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The housing market crash that accompanied the 2007-2009 recession has had severe negative effects on the U.S. economy. Since December 2008, the target federal funds rate has been 0.0-0.25%
Assuming the Fed keeps the real interest rate constant, a recovery in the housing market would cause the ________, and the output gap would ________. A) MP curve to shift up; become less negative B) MP curve to shift down; become more negative C) IS curve to shift to the left; become more negative D) IS curve to shift to the right; become less negative
If a price ceiling is not binding, then it will have no effect on the market
a. True b. False Indicate whether the statement is true or false
Calculate the firm's total profit.
Answer the following statement(s) true (T) or false (F)
1. When supply and demand move at the same time, the change of one variable (price or quantity) can be predicted, but the direction of the effect on the other variable cannot be predicted with any certainty. 2. If the decrease in demand is greater than the increase in supply, the equilibrium price and equilibrium quantity will fall. 3. An increase in supply and an increase in demand causes a decrease in equilibrium quantity. 4. For HD televisions, the effect of increased supply pushing prices down outweighed the effect of increased demand pushing prices up.