“The market has failed to provide enough rental housing in New York City. This demonstrates another failure of free markets-they may lead to shortages of necessities.” Explain why you agree or disagree.
What will be an ideal response?
An economist would disagree. The free market leads to equilibrium, at which quantity demanded equals quantity supplied. There are neither shortages nor surpluses at the equilibrium point. The NYC shortage of rental housing is a result of rent ceilings, which interfere with the ability of the market to allocate scarce resources.
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An increase in the demand for chicken is predicted to ________ the real wage and ________ employment of unskilled workers in a poultry processing plant.
A. increase; increase B. decrease; decrease C. increase; not change D. increase; decrease
Uncertainty includes all of the following except ____
a. unknown effects of deliberate actions b. incomplete information as to the type of competitor c. random disturbances d. unverifiable claims e. accidents due to weather hazards
Other things the same, if a country raises its saving rate, when is productivity growth higher?
a. as the economy moves toward the long run and in the long run. b. as the economy moves toward the long run, but not in the long run. c. in the long run, but not as the economy moves toward the long run. d. neither as the economy moves toward the long run, nor in the long run.
Strategic bargaining:
A. may reduce the number of trade restrictions if it is successful. B. may increase the number of trade restrictions if it is successful. C. always increases the number of trade restrictions. D. always reduces the number of trade restrictions.