Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $1
A) not enough consumers want to buy iced tea.
B) the quantity supplied is economically efficient but the quantity demanded is economically inefficient.
C) economic surplus is maximized.
D) the quantity supplied is less than the economically efficient quantity.
D
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The demand for labor depends primarily on the additional output produced as a result of hiring an additional worker and
A) the additional revenue received from selling the output produced as a result of hiring an additional worker. B) the payment made to the worker for producing the additional output. C) the number of workers willing to produce the additional output. D) the elasticity of demand for the output produced by the worker.
An adverse supply shock with a vertical supply of labor curve will
A) raise the price level and leave unemployment unchanged. B) raise unemployment and lower the price level. C) raise both unemployment and the price level. D) lower both unemployment and the price level.