Which of the following is not an accurate summary of the equilibrium associated with a single competitive labor market?
A. Firms receive surplus equal to the area above the wage rate and below the demand for labor.
B. Total economic surplus is maximized.
C. Total firm surplus equals total worker surplus.
D. All workers are paid the same market-clearing wage.
E. Workers receive surplus equal to the area below the wage rate and above the supply of labor.
Answer: C
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Suppose a country operates on its production possibility frontier when it produces 1000 books and 1000 tables. The combination of ________ reflects ________
A) 500 books and 1000 tables; an inefficient but attainable point B) 1000 books and 500 tables; an efficient point C) 1000 books and 1000 tables; a free lunch D) 500 books and 500 tables; an attainable and efficient point E) 1000 books and 1500 tables; a free lunch
Political institutions are more likely to allow and encourage the emergence of good economic institutions and policies when
a. the top government executives have enough power to impose good economic arrangements on the nation. b. constitutional constraints prevent laws and regulations that weaken the rights of property owners, curtail voluntary exchange, and provide for decentralization of government. c. the elected executive and legislative branches have fewer constraints on what they can do, leaving them free to innovate and improve economic institutions. d. well organized interest groups exert a powerful influence on the political process.
When the money market is drawn with the value of money on the vertical axis, a decrease in the money supply leads people to
a. spend more so the value of a dollar rises. b. spend more so the value of a dollar falls. c. spend less so the value of a dollar rises. d. spend less so the value of a dollar falls.
Which of the following would indicate a relatively large amount of market power?
A. Low cross-price elasticity with other products B. Highly price elasticity demand C. Low Lerner index D. all of the above E. none of the above