The existence of union wages, efficiency wages, and the minimum wage
A) raises the real wage rate above the equilibrium wage rate and raises the natural unemployment rate.
B) lowers the real wage rate below the equilibrium wage rate and creates a shortage of labor.
C) raises the real wage rate above the equilibrium wage rate and creates a shortage of labor.
D) raises the real wage rate above the equilibrium wage rate and lowers the natural unemployment rate.
E) does not have an impact on the equilibrium wage rate or on the amount of unemployment.
A
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If consumers have limited information about price and search costs exist, then
A) the result must be that all firms will charge the same price. B) the monopoly price must result. C) the full-information, competitive price is not an equilibrium. D) the difference in prices between firms will be greater than the search cost.
Consider the market for capital equipment. Suppose the price of firms' output increases. Holding all else constant, the equilibrium rental price of capital equipment will
a. increase. b. decrease. c. not change. d. It is not possible to determine what will happen to the equilibrium rental price of capital equipment.