A minimum wage set above the equilibrium wage rate
A) decreases job rationing.
B) decreases the natural unemployment rate because fewer workers will become unemployed.
C) increases the natural unemployment rate.
D) increases the number of workers employed.
E) increases the demand for labor.
C
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Political scientist Elinor Ostrom won the 2009 Nobel Prize in Economics for demonstrating in detail how communities around the world
a. experience gaps in wealth and economic power. b. manage common pool resources effectively. c. see power as the ability to collaborate.
Which of the following statements best reflects the production decision of a profit-maximizing firm in a competitive price-taker market when price falls below the minimum of average variable cost?
a. The firm will continue to produce to attempt to pay fixed costs. b. The firm will stop production to minimize its losses. c. The firm will stop production as soon as it is able to pay its sunk costs. d. The firm will continue to produce in the short run but will likely exit the market in the long run.