When labor supply increases,
a. the marginal productivity of workers always increases.
b. profit-maximizing firms reduce employment.
c. wages increase as long as labor supply is upward sloping.
d. wages decrease as long as labor demand is downward sloping.
d
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In general, during the business cycle, when economic activity is peaking:
a. interest rates begin to creep higher b. unemployment levels are low c. inflation begins to edge higher d. all of the above
According to the simple quantity theory of money in the AD-AS framework, when the money supply decreases, the result is __________ in Real GDP and __________ in the price level
A) no change; no change B) a rise; no change C) no change; a rise D) a rise; a fall E) no change; a fall
An increase in aggregate demand will result in inflation.
Answer the following statement true (T) or false (F)
Which of the following statements is TRUE about taxes?
A) Taxes always create more deadweight loss than do price ceilings and price floors. B) Taxes decrease both consumer surplus and producer surplus while creating a deadweight loss. C) Government revenue from a tax is always greater than the loss of producer surplus and consumer surplus. D) Both answers A and C are correct.