In the short run, which one of the following causes a competitive firm to hire more labor?
A) an increase in wage rate
B) an increase in the output price
C) a specific tax imposed on the firm's output
D) a decrease in the output price
B
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
You observe that an increase in the price of salsa decreases the demand for tortilla chips and increases the demand for potato chips. You can conclude that
A) salsa and tortilla chips are substitutes. B) salsa and potato chips are complements. C) tortilla chips and potato chips are complements. D) salsa and tortilla chips are complements.
The FOMC states its overall objectives for interest rates in
A) the Governors' Order. B) the Policy Directive. C) the Federal Reserve Bulletin. D) the Chairman's Order.
The law of comparative advantage applies to exchange betwee
What will be an ideal response?