Assume the current market price of candles is such that there is a surplus (i.e., excess supply). Which of the following best describes the adjustment process in a competitive market?
A. As the price decreases, the quantity demanded decreases while the quantity supplied increases.
B. As the price increases, the quantity demanded decreases while the quantity supplied increases.
C. As the price decreases, the quantity demanded increases while the quantity supplied decreases.
D. As the price increases, the quantity demanded and the quantity supplied decrease.
Answer: C
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Refer to Table 4-7. If a minimum wage of $12.50 is mandated there will be a
A) shortage of 40,000 units of labor. B) surplus of 80,000 units of labor. C) shortage of 80,000 units of labor. D) surplus of 40,000 units of labor.
According to the classical system, saving is a function of
a. income. b. the real interest rate. c. the real wage. d. the profitability of firms. e. all of the above.