A person's sensitivity to a price change for a good, such as breakfast cereal, depends on all of the following except the
a. price of the good
b. cost of producing the good
c. person's income
d. availability and closeness of substitutes
e. time the person has to adjust to the price change
B
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Refer to Table 17-5. Oil Can Harry's, a new automobile service shop, is ready to start hiring. The table above shows the relationship between the number of mechanics the firm hires and the quantity of oil changes it produces
a. Suppose the price of an oil change is $20. Complete the table by filling in the values for marginal product and marginal revenue product. b. Oil Can Harry's is an input price-taker. Suppose the wage paid to mechanics is $80 per day. What is the profit-maximizing number of mechanics? c. Suppose the wage rate rises to $100 per day. (i) What happens to the firm's demand curve for mechanics? (ii) What happens to the profit-maximizing quantity of mechanics? d. Suppose the wage rate is $60 per day and the price of an oil change is now $15. (i) What happens to the firm's demand curve for mechanics? (ii) What happens to the profit-maximizing quantity of mechanics?
The long-run rate of unemployment to which an economy always gravitates is the
A) normal rate of unemployment. B) natural rate of unemployment. C) neutral rate of unemployment. D) inflationary rate of unemployment.