Assume Kara's budget constraint is represented by line A in the graph shown, and that her income to spend on these two items is $24. What would cause her budget constraint to move to B?
A. The price of movie tickets increases to $6.
B. The price of movie tickets increases to $4.
C. The price of movie tickets falls to $4.
D. The price of movie tickets falls to $6.
Answer: B
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Jane's Garage Cleaning is a perfectly competitive firm that currently cleans 40 garages a week. Jane's marginal cost is less than the price she charges. Jane can increase her profit if she
A) charges a higher price. B) charges a lower price. C) cleans fewer than 40 garages a week. D) cleans more than 40 garages a week.
Wage differences among workers of different races and gender could be due to all of the following except
A) differences in preferences for jobs. B) labor unions. C) differences in work experience. D) differences in education.
According to the above figure, if the government imposes a minimum wage equal to Wm, the effect will be
A) a reduction in employment from Qe to Qm. B) an increase in employment from Qe to Qm. C) a decrease in labor supplied, from C to E. D) an increase in labor supplied, from A to E.
If the imposition of a binding minimum wage results in much higher unemployment among workers seeking minimum wage jobs,
a. firms will respond by demanding more labor. b. those workers who are employed will be worse off than before the minimum wage law. c. labor demand is relatively elastic. d. labor demand is relatively inelastic.