If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry, what impact would this have on the supply and demand in the market for airline service, assuming no other changes
take place in this market?
A reduction of wages and benefits will shift the supply curve to the right, but will not shift the demand curve. This will decrease the equilibrium price and increase the equilibrium quantity in the market for airline service.
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A producer is said to have a comparative advantage in the production of a good when:
A) the producer has a higher opportunity cost than another producer. B) the producer can produce more units of the good per hour than another producer. C) the producer has a lower opportunity cost than another producer. D) the producer charges a higher price for the good than the other producers.
In the 1980s the CEO of Coca Cola corporation found out that its core business was making roughly 15% rate of return on investor capital
However, he also discovered that some of the newly acquired subsidiaries were not making anywhere near that amount. He decided to ask each of these companies to come up with a plan to push the rate of return closer to the 15% mark or he warned that these companies might be sold. Why would the CEO sell off companies or operations that are still profitable?
Cost-push inflation is due to:
a. labor cost increases. b. energy cost increases. c. raw material cost increases. d. all of these.
Positive economics
a. postulates relationships among economic variables that are potentially refutable by real-world events. b. is strictly quantitative and is, therefore, of little value to policy makers. c. will usually indicate which economic policy is best. d. is the same as normative economics.