Suppose the elasticity of labor demand is less than 1 in absolute value. Imposing a minimum wage above the equilibrium wage will:
A. result in full employment.
B. make few workers better off.
C. increase the earnings of every worker.
D. increase the earnings of workers as a group.
Answer: D
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The production possibilities frontier is a diagram that shows:
a. the productively efficient combinations of two products that an economy can produce given the resources it has available. b. the productively efficient combinations of two products that can be produced on a worldwide basis given demand. c. the productively inefficient combinations of a single product that an economy can produce given the resources it has available. d. the productively efficient combinations of two products that an economy can produce regardless of if the resources are available.
Winner-take-all refers to
a. top performers in a labor market receiving much more than those who are just slightly less productive b. computing and technology companies driving their competitors out of the market c. rich households paying less in taxes now than they did 30 years ago d. a negative income tax system that allows individuals to become superstars e. the Lorenz curve shifting closer to the diagonal as the rich become richer
When the price of a normal good falls, consumers buy a larger quantity because of the ________ effect and the ________ effect
A) substitution; income B) normal; inferior C) substitute; complement D) supply; demand
In 2008 and 2009, the quantity theory of money did a ________ job of predicting year-to-year changes in the inflation rate because ________
A) good; interest rates behaved predictably B) poor; the Fed changed the growth rate of the quantity of money too quickly C) poor; velocity of circulation plunged D) good; real GDP remained stable E) poor; the price level and the velocity of circulation did not change