As the wage rate rises, firms will respond by
A. selling more output to cover the additional costs of the labor force.
B. hiring fewer workers because the labor demand curve slopes downward.
C. selling the same amount of output, but passing on the higher labor costs to the customer.
D. hiring more workers because a higher wage rate will make workers work harder.
Answer: B
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The unemployment rate in Utopia rose to 12% when the country was passing through a recession. How will the labor market in Utopia be affected if an expansionary monetary policy triggers an inflation in the economy?
What will be an ideal response?
When a country imports a good, the ________ in consumer surplus is ________ the ________ in producer surplus
A) decrease; larger than; increase B) decrease; smaller than; increase C) increase; smaller than; decrease D) increase; equal to; decrease E) increase; larger than; decrease