Exhibit 7-6 A firm's cost and MC curves
?
In Exhibit 7-6, if this firm is currently producing 20 units of output, this firm is
A. earning a profit of $10.
B. earning a profit of $.50.
C. losing $10.
D. losing $0.50.
Answer: A
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Equilibrium wage will increase if quantity of labor demanded rises
Indicate whether the statement is true or false
If a minimum wage law is passed imposing a price floor above the equilibrium price of unskilled labor and employers increasingly used efficiency wages, it would ___ unemployment and ____ the natural rate of unemployment: a. Increase; increase
b. Increase; not change. c. Not change, increase. d. Do none of the above.
The use of expensive cars and yachts to impress others rather than just as transportation is an example of what economists call:
A. bounded rationality. B. conspicuous consumption. C. rules of thumb. D. focal point equilibrium.
The price elasticity of demand is defined as the:
A. Percentage change in quantity demanded times the percentage change in price. B. Unit change in price divided by the unit change in quantity demanded. C. Percentage change in quantity demanded divided by the percentage change in price. D. Unit change in quantity demanded times the unit change in price.