The demand curve for labor indicates that:
a. as the real wage rate increases, employers will hire more workers.
b. as the nominal wage rate increases, employers will hire more workers.
c. as the nominal wage rate decreases, the real wage rate increases.
d. as the real wage rate increases, employers will hire fewer workers.
e. as the real wage rate decreases the nominal wage rate increases.
d
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Suppose that due to a drought, the price of agricultural goods rises. If land is specific to agriculture, capital is specific to manufacturing, and labor is mobile between sectors, which of the following is TRUE?
a. The percentage change in labor income is less than zero. b. The percentage change in labor income is greater than the percentage change in the relative price of agricultural goods. c. The percentage change in labor income is greater than the percentage change in the relative price of manufacturing goods. d. The percentage change in labor income is less than the percentage change in the relative price of agricultural goods.
The smaller the price elasticity of demand, the
a. more likely the product is a luxury. b. smaller the responsiveness of quantity demanded to a change in price. c. more substitutes the product has. d. greater the responsiveness of quantity demanded to a change in price.