If the relative price of one product rises and labor is mobile, then:
a. the percentage increase in the equilibrium real wage will be exactly the same as the percentage increase in the relative price.
b. the percentage increase in the equilibrium real wage will be lower than the percentage increase in the relative price.
c. the percentage increase in the equilibrium real wage will be higher than the percentage increase in the relative price.
d. the equilibrium real wage will not change.
Ans: b. the percentage increase in the equilibrium real wage will be lower than the percentage increase in the relative price.
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Guaranteed benefits under government programs such as Social Security or Medicare are called
A) controllable expenditures. B) entitlements. C) automatic stabilizers. D) discretionary spending.
A government surplus has the effect of :
a. Increasing the demand for real loanable funds, increasing the real risk-free interest rate, and increasing the quantity supplied of real loanable funds per period. b. Increasing the supply of real loanable funds, reducing the real risk-free interest rate, and increasing the demand for real loanable funds. c. Decreasing the supply of real loanable funds, increasing the real risk-free interest rate, and decreasing the quantity demanded of real loanable funds per period. d. Decreasing the supply of real loanable funds, increasing the real risk-free interest rate, and decreasing the demand for real loanable funds per period. e. Increasing the supply of real loanable funds, reducing the real risk-free interest rate, and increasing the quantity demanded of real loanable funds per period.