Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 7, Problem 6MCQ
To determine
To choose: The appropriate option to fill in the blanks in the given statement.
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Read the news clip, then answer the following questions.
If the new minimum wage of $15.00 an hour is enforced and the maximum amount of
job search takes place, then the higher minimum wage
workers' surplus and
firms' surplus.
OA. increases; decreases
OB. decreases; decreases
OC. increases; increases
OD. decreases; increases
The $15 wage
fairness to our economy.
does not bring
brings
New York
"Raising
and bring
been force
Between
gradually
of the state
Assume that as the economy booms, the demand for business and consumer loans rises significantly, while the supply of funds and loans remains constant. As a result, the market interest rate for business and consumer loans rises to 20% per year. The government implements a ceiling on interest rates of 15% a year and as a result...
Group of answer choices
The quantity demanded of business and consumer loans rises, while the quantity supplied falls and a surplus occurs
A greater number of business and consumer loans are made at a lower interest rate than previously.
The demand of business and consumer loans rises, while the supply falls and a shortage occurs
The quantity demanded of business and consumer loans rises, while the quantity supplied falls and a shortage occurs
An increase in the minimum wage causes the quantity supplied of labor to
of labor.
labor
and thus causes a
O increase; decrease : surplus
O decrease: increase: shortage-
O decrease: increase: surplus
O increase: decrease; shortage
s
the quantity demanded of
Chapter 7 Solutions
Foundations of Economics (8th Edition)
Ch. 7 - Prob. 1SPPACh. 7 - Prob. 2SPPACh. 7 - Prob. 3SPPACh. 7 - Prob. 4SPPACh. 7 - Prob. 5SPPACh. 7 - Prob. 6SPPACh. 7 - Prob. 7SPPACh. 7 - Prob. 8SPPACh. 7 - Prob. 9SPPACh. 7 - Prob. 10SPPA
Ch. 7 - Prob. 11SPPACh. 7 - Prob. 1IAPACh. 7 - Prob. 2IAPACh. 7 - Prob. 3IAPACh. 7 - Prob. 4IAPACh. 7 - Prob. 5IAPACh. 7 - Prob. 6IAPACh. 7 - Prob. 7IAPACh. 7 - Prob. 8IAPACh. 7 - Prob. 9IAPACh. 7 - Prob. 1MCQCh. 7 - Prob. 2MCQCh. 7 - Prob. 3MCQCh. 7 - Prob. 4MCQCh. 7 - Prob. 5MCQCh. 7 - Prob. 6MCQCh. 7 - Prob. 7MCQCh. 7 - Prob. 8MCQ
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- 4A. Construct a labor market with perfectly inelastic demand that is kinked at wage w*. 4B. Construct a labor market with perfectly inelastic supply that is kinked at wage w*. 4C. Construct a labor market with perfectly elastic supply that is double-kinked at wage w*. Answer all otherwise dounvotearrow_forwardFigure: Price Floors Wages $20 14 O d' B O b. area C Oc area F Demand 5,000 8,000 12.000 Q of Labor Supply 11,000 Suppose the town of Drippling Springs enacts a wage floor of $20. What is the lost consumer surplus from the wage floor? a, area A d. area ABCarrow_forwardpleae help me understandarrow_forward
- The table shows the market for house painters in New Mexico. a. If New Mexico introduces a strictly enforced minimum wage for house painters of $5.00 an hour, house painters are employed. This causes OA. a surplus of labor OB. a shortage of labor OC. neither a surplus nor a shortage of labor CAIR and thus, house painters are unemployed. b. If New Mexico introduces a strictly enforced minimum wage for house painters of $6.50 an hour, house painters are employed. This causes OA. a surplus of labor OB. a shortage of labor O c. neither a surplus nor a shortage of labor and thus, house painters are unemployed. Wage rate (dollars per hour) 5.00 5.50 6.00 6.50 7.00 7.50 Quantity demanded Quantity supplied (house painters) 300 250 200 150 100 50 150 175 200 225 250 275arrow_forwardHow does the amount of employment created by an increase in the minimum wage depend on the elasticity of labor demand? Group of answer choices: a. When the minimum wage increases, employment will fall by a greater amount when the demand for labor is more elastic. b. When the demand for labor is more elastic, raising the minimum wage has no impact on employment. c. When the demand for labor is more inelastic, raising the minimum wage has no impact on employment. d. When the minimum wage increases, employment will fall by a greater amount when the demand for labor is more inelastic.arrow_forwardSuppose that the market for labor is initially in equilibrium. An increase in the price of output will cause the equilibrium wage a. and the equilibrium quantity of labor to fall. b. and the equilibrium quantity of labor to rise. c. to rise and the equilibrium quantity of labor to fall. d. to fall and the equilibrium quantity of labor to rise.arrow_forward
- 'The production function of a small firm that produces t-shirts is given by the table below . 10 12 14 16 18 20 22 24 18 33 57 72 84 93 99 102 102 99 For each L, solve for AP and MP. Round-up vour answers to two decimals: Represent VOur answers On table: No need to show the solutions. BJ What would be the output elasticities of labor? Round-Up vour answers t0 twO decimals. If the firm is hiring 16 and 12 workers, interpret the computed € values C Identify the range of number of laborers under increasing marginal returns diminishing marginal returns, and negative marginal returns. D Explain why the firm experiences diminishing marginal returns. EJ If the firm sells each t-shirt for P75 and each worker receives wage of PA5O per day. what is the optimal number of laborers t0 hire to maximize profits?'arrow_forwardExplanation it correctly and detailsarrow_forwardIf the minimum wage is set A. equal to the equilibrium wage, it will create a shortage of labor. B. equal to the equilibrium wage, it will create a surplus of labor. C. below the equilibrium wage, it will create unemployment. D. below the equilibrium wage, it will create a shortage of labor. E. above the equilibrium wage, it will create unemployment.arrow_forward
- answer quicklyarrow_forwardD. Bill's Diner 5. Which of these would cause a shortage in labor? * A. the supply of workers exceeds the demand O B. the demand for workers exceeds the supply O C. the number of workers equals the demand for labor O D. the supply curve for the product a business produces shifts to the left 6. If wages decreased in the labor market, what likely caused it?arrow_forwardThe minimum wage is set above the equilibrium wage rate. Does the minimum wage create inefficiency? Select one: A. yes B. no C. only if the supply of labor is perfectly inelastic O D. only if the supply of labor is perfectly elastic O E. only if employment exceeds the efficient amount Demand 5 10 15 20 25 30 Quantity (cups per hour) The figure above shows the demand curve for Starbucks latte. In the figure above, the demand is elastic in the range of prices between Select one: O A. $3.50 and $4.50 per cup. B. $1.75 and $2.75 per cup. C. $2.00 and $4.00 per cup. D. $2.50 and $3.50 per cup. O E. $1.00 and $2.00 per cup. Other goods (units per day) 70 60 50 40 30 20 10 PPF Pizza (thousands per day) Marginal benefit and marginal cost (units of other goods per pizza) 20 MC 15 10 MB 4 8 Pizza (thousands per day) 2 4 6. Pizza (thousands per day) The figure above shows the PPF, marginal cost curve, and marginal benefit curve for pizza. In the figure above, when 4,00o pizzas are produced, the…arrow_forward
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