The marginal expenditure of a monopsonist is $4. The wage it currently pays is $3. The labor supply curve has a constant elasticity. What is the elasticity of the labor supply?
A) 0.33
B) 0.66
C) 1
D) 3
A
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The exchange rate is volatile because
A) the demand curve and the supply curve are horizontal. B) when a relevant factor changes, demand and supply tend to change in opposite directions. C) the demand curve is vertical. D) the supply curve is vertical. E) when a relevant factor changes, demand and supply tend to change in the same direction.
When banks and other financial institutions become insolvent, ________
A) the problem of asymmetric information becomes more acute B) it is easier to distinguish the good creditors and borrowers from the bad C) surviving creditors will attract borrower-spenders by lowering the real interest rate D) the resulting increase in short-run aggregate supply will discourage investment