Which of the following statements is true?
A) A higher wage can raise profits if productivity is directly proportional to wages.
B) A higher wage can reduce the quantity supplied of labor.
C) A higher wage can increase the quantity demanded of labor.
D) A higher wage can raise profits if productivity of workers is fixed.
A
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If you negotiated a salary based on an anticipated inflation rate of 4 percent, and the actual inflation rate turned out to be 6 percent
A) your employer would have gained at your expense. B) your real wage will increase, but your nominal wage will decrease. C) the purchasing power of your wages will not change, since purchasing power is based on your nominal wage. D) the purchasing power of your real wages would be more than you anticipated.
An agricultural price support
A) will create a surplus in the relevant market, assuming the price support is above equilibrium price. B) will create a shortage in the relevant market, assuming the price support is above equilibrium price. C) is an example of a price floor. D) will lead to greater total revenue for farmers if demand (for the product) farmers sell is inelastic between the equilibrium price and the price support (and assuming the price support is above equilibrium price). E) a, c, and d