If a union successfully negotiates for higher wages and benefits for steel workers, what impact would this have on supply and demand in the market for steel, assuming no other changes take place in this market?
What will be an ideal response?
An increase in wages and benefits will shift the supply curve to the left, but will not shift the demand curve. This will increase the equilibrium price and decrease the equilibrium quantity in the market for steel.
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Research on productivity shocks has shown that
A) productivity shocks have only nominal effects. B) there have been no identifiable productivity shocks in the U.S. economy since World War II. C) small productivity shocks can explain large business cycle fluctuations. D) large productivity shocks produce only small deviations in aggregate output.
When personal computers became popular, several new firms entered the competition. What effect did this have on supply?
A. Increase in the quantity supplied B. Decrease in the quantity supplied C. Shift of the supply curve to the left D. Shift of the supply curve to the right