If the price of a good increases, all else equal, consumers perceive
a. an increase in purchasing power if the good is an inferior good.
b. an increase in income if the price increase occurs for a normal good.
c. a decrease in purchasing power.
d. a net gain in purchasing power if they decrease consumption of some goods.
c
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If the value of marginal product of the last worker hired is $24 and the wage rate is $25, then
A) more workers should be hired. B) the worker should be fired. C) the firm has hired the profit maximizing number of workers. D) the firm is earning $1 of profit from this worker.
Suppose that the labor market for high school chemistry teachers is initially in equilibrium. Chemistry teachers use laboratory chemicals as an important part of their jobs. New environmental regulations ban the use of many chemicals, which means that fewer laboratory chemicals are available for high school chemistry teachers to use in their jobs. What happens to the equilibrium wage and quantity
of high school chemistry teachers? a. Both the equilibrium wage and quantity increase. b. Both the equilibrium wage and quantity decrease. c. The equilibrium wage increases, and the equilibrium quantity decreases. d. The equilibrium wage decreases, and the equilibrium quantity increases.