The individual firm that hires labor under competitive conditions faces a labor supply curve that
A. slopes upward to the right.
B. slopes downward to the right.
C. is vertical, because workers need a job at any wage.
D. is horizontal, because individual firms have no control over wages.
Answer: D
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The above figure shows the market for rice in Japan. SDomestic represents the domestic supply curve, and Sworld represents the world supply curve. If imported rice is banned, the loss in social welfare is
A) a + b + c + d + i + j. B) a. C) c + e. D) a + b + c + d.
The "invisible hand" using Adam Smith's terminology refers to
a. government control of the market. b. market forces working through the price mechanism. c. the money supply that serves to keep the economy working smoothly. d. the role of innovation in maintaining a steady rate of growth. e. "behind-the-scenes" policy making to influence how markets allocate scarce resources.