Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour. A minimum wage law that creates a price floor of $8.50 an hour leads to
A) a surplus of lifeguards in Houston.
B) a shortage of lifeguards in Houston.
C) no changes in the lifeguard market.
D) a change in the quantity of lifeguards supplied but no change in the quantity of lifeguards demanded.
E) an increase in the number of lifeguards employed.
A
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By using only the aggregate demand curve, we can determine
A) only the price level. B) only the quantity of real GDP. C) both the price level and quantity of real GDP. D) neither the price level nor the quantity of real GDP.
Which of the following was a key belief of Adam Smith?
a. he felt that human goodness would provide adequate goods and services to everyone. b. he stressed that limited exchange and command economies would prevent the exploitation of the poor. c. he believed that individuals pursuing their own interests would direct economic activity in the most advantageous way. d. he lectured about the importance of gold and silver in providing a stable monetary system.