In the labor market, adjustments to changes in supply and demand
A. do not apply, since the labor market does not respond to supply and demand forces.
B. do not apply, since wages in the labor market always go up.
C. usually take time to occur.
D. usually occur instantly.
Answer: C
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Maggie is trying to convince her friend Hannah to spend the morning at the beach instead of studying economics. Maggie’s argument is that the beach is free so will not cost Hannah anything to go. Maggie even volunteers to drive. Maggie’s argument
a. is correct; it is free to go to the beach. b. is forgetting Hannah’s opportunity cost of not being able to study. c. assumes Hannah has to eat at home or the beach so it will not cost Hannah additional money. d. is forgetting sunk costs.
Pollution is an example of:
A. Inefficiency by the polluting firm. B. Market failure. C. Government transfers. D. Economic instability.
If inflation increases unexpectedly, then
A) borrowers pay a higher real interest rate than they expected. B) lenders receive a lower real interest rate than they expected. C) lenders gain and borrowers gain. D) neither borrowers nor lenders lose.
The degree to which a new casino will have an economic impact reflects the potential
A. legislation. B. local substitution. C. addictiveness of gambling. D. positive externalities.