The figure illustrates all of the following EXCEPT
A) if the union establishes by collective bargaining a wage rate that exceeds equilibrium at point Wu an excess quantity of labor will be supplied.
B) if the union establishes by collective bargaining a wage rate that exceeds equilibrium, an excess quantity of labor will be demanded.
C) there is a trade-off union leadership faces: Higher wages inevitably mean a reduction in total employment—a smaller number of positions.
D) at higher wages, more workers will seek to enter the industry, thereby adding to the surplus of workers where QS is greater than QD.
B
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The optimal quantity of air pollution is
A) whatever amount of pollution is produced by the profit maximizing firm. B) found by equating the marginal benefits from further reductions in pollution and the marginal costs of further reductions in pollution. C) found by setting the quantity of air pollution equal to the quantity of water pollution. D) a meaningless concept since monetary values cannot be attached to problems associated with pollution.
In a perfectly competitive market, if P < MC, then
A) too little output is being produced. B) too much output is being produced. C) production is efficient, as the firm is earning profits. D) the firm is paying a price for resources that is too high.
The total cost curve generally has
a. slope values which first decrease and then increase rapidly. b. slope values which first increase rapidly and then decrease. c. increasing slope values. d. decreasing slope values.
Figure 4-6
Refer to . The amount of the excise tax I is
a.
$.50.
b.
$1.50.
c.
$1.00.
d.
$2.00.