People increase their labor supply in response to a temporary increase in government purchases because
A) current or future taxes will increase, making them financially worse off.
B) they need to work more to keep up with their neighbors.
C) interest rates will rise, causing a substitution effect.
D) higher spending today will lead to higher spending in the future, as well.
A
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Diversification
A) maximizes risk. B) maximizes profit. C) minimizes risk. D) minimizes costs.
Given the scenario described, if the market price of hammers increased from $6 to $8:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. A. producer participation in the market would increase. B. producer participation in the market would decrease. C. producer participation in the market would remain unchanged. D. total producer surplus would increase by $2.