If marginal revenue and marginal cost are not equal, profit can be maximized by
a. increasing output if MR > MC.
b. decreasing output if MC > MR.
c. moving to the output where the slopes of TR and TC are equal.
d. All of the above are correct.
d
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Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. What happens to the equilibrium wage and quantity of life guards?
a. Both the equilibrium wage and quantity increase. b. Both the equilibrium wage and quantity decrease. c. The equilibrium wage increases, and the equilibrium quantity decreases. d. The equilibrium wage decreases, and the equilibrium quantity increases.
The heart of the argument against an increase in the minimum wage is one based on
A. the elasticity argument. B. consumer and producer surplus analysis. C. the macroeconomic argument. D. the work effort argument.