When the prevailing market wage is above equilibrium, we say:
A. there is no unemployment.
B. there is a surplus of labor.
C. the quantity of labor demanded is more than the quantity supplied.
D. All of these are true.
B. there is a surplus of labor.
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From Example 1.2 in the textbook, Pindyck and Rubinfeld distinguish between the mass market and dealer market for bicycles. Although there are many dealers in the U.S. and only a few mass merchandisers, we should expect the dealer market to be somewhat less competitive than the mass market. Why?
D B and C are correct. A Due to their differences in quality and performance, dealer bicycles are not close substitutes. (A) C Dealers are small sellers and have little control over bicycle prices. B The geographic extent of the market for dealer bicycles is typically small, so the individual sellers do not have many local competitors. (B) E A and B are correct.
What is the role of profits in the neoclassical growth theory versus the new growth theory?
What will be an ideal response?