Suppose that the labor market for life guards is initially in equilibrium. Then swimming pool owners adopt a new labor-saving technology that uses computers to monitor the locations of swimmers in the pool. What happens to the equilibrium wage and quantity of life guards?
a. Both the equilibrium wage and quantity increase.
b. Both the equilibrium wage and quantity decrease.
c. The equilibrium wage increases, and the equilibrium quantity decreases.
d. The equilibrium wage decreases, and the equilibrium quantity increases.
b
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An example of the outlet substitution bias in the calculation of the CPI is a price increase in
A) a trip to Mexico for a couple that had previously taken vacations in Europe. B) a 2014 Honda Civic relative to a 2004 Honda Civic. C) GPS units versus AAA map books. D) textbooks bought through the campus bookstore relative to textbooks via Craigslist. E) olive oil versus vegetable oil.
Assume that you have taken over management of a small concession stand on a local beach for the summer. Your main product is iced water, popular on hot days. You’ve been selling 400 cups per day at 50 cents each. The cups cost 5 cents each. One of your customers suggests that you cut the price to 40 cents to make more money. For the customer to be correct, how much must your sales increase?
What will be an ideal response?
According to the classical model, total employment will increase when
a. the birth rate increases b. the government creates more jobs c. the labor force increases d. individuals receive more education e. there is a recession
What is the shape of average cost curve? Provide the reason for that particular shape