Consider the labor market in an industry that is initially in equilibrium. Which of the following will result when a government policy suddenly forces firms in this industry to improve their working conditions?
a. The labor supply curve will shift to the right and exert a downward pressure on the wage rate.
b. The labor supply curve will shift to the left and exert an upward pressure on the wage rate.
c. The labor demand curve will shift to the right and exert an upward pressure on the wage rate.
d. The labor demand curve will shift to the left and exert an upward pressure on the wage rate.
b
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If the price of a movie rises 3 percent and, as a result, the quantity demanded of video rentals increases 6 percent, then the cross elasticity of demand is
A) 2. B) 1/2. C) -1/2. D) -2. E) 9.
When discussing the private capital account, asset flows include all but which one of the following?
A) capital expenditures by domestic firms B) foreign securities purchased by domestic citizens C) changes in the balances of a bank's cash deposit from foreign transactions D) an investment in a foreign subsidiary by a domestic firm