Suppose the current equilibrium wage rate for landscapers is $6.65 in Little Rock; $7.50 in St. Louis and $9.05 in Raleigh. An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in

Suppose the economy is producing below potential GDP and the Federal Reserve implements the appropriate change in monetary policy, but not until after the economy has started to recover from the recession. In this situation there is a real danger that

A) the Fed's expansionary policy will result in too small of an increase in GDP. B) the Fed's expansionary policy will result in too large of an increase in GDP. C) the Fed's contractionary policy will result in too large of a decrease in GDP. D) the Fed's contractionary policy will result in too small of a decrease in GDP.

Consider a used car market in which half the cars are good and half are bad (lemons). If buyers are rational, the prices being offered for used cars will result in

A) a larger proportion of good cars being sold and consequently, consumer surplus is increased. B) an equal proportion of good cars and lemons being sold in an inefficient market. C) a larger proportion of lemons being sold and consequently, producer surplus is increased. D) an equal proportion of a good cars and lemons being sold in an efficient market.