The equilibrium wage rate in an industry is determined by
A) finding where the market supply curve indicates that the substitution effect and income effect of a wage increase are offsetting.
B) the intersection of the market demand curve for labor and the market supply curve for labor.
C) the strength of the substitution effect relative to the elasticity of demand for labor.
D) whether workers or management are better at negotiating.
B
You might also like to view...
A single-price monopolist will produce at the point where
A) MR = 0. B) MR = P. C) MR = MC. D) P = MC.
Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is
A) 2 pizzas. B) 1/2 pizza. C) 5 pizzas. D) 1 pizza.
An increase in the average tax rate that ________ the budget deficit in an example of ________
A) raises, automatic stabilization B) raises, discretionary fiscal policy C) lowers, automatic stabilization D) lowers, discretionary fiscal policy
Perfect competition and monopolistic competition are similar in that both market structures include
A) price-taking behavior by firms. B) a homogeneous product. C) no barriers to entry. D) very few firms.