What do economists mean by the term "sticky wage"?
A. It refers to the reluctance by employers to increase nominal wages during an inflationary period.
B. It refers to a wage that is slow to adjust to its equilibrium level, creating sustained periods of shortage or surplus in the labor market.
C. It refers to a breakdown in wage negotiations between employers and employee unions.
D. It refers to a union negotiated wage.
Ans: B. It refers to a wage that is slow to adjust to its equilibrium level, creating sustained periods of shortage or surplus in the labor market.
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The demand for labor curve shows the relationship between _________
A. the quantity of labor employed and firms' profits B. all households' willingness to work and the real wage rate C. the quantity of labor businesses are willing to hire and the real wage rate D. the labor force and the real wage rate
Refer to Figure 5-1. Suppose the current market equilibrium output of Q1 is not the economically efficient output because of an externality. The economically efficient output is Q2. In that case, the diagram shows
A) the effect of an external cost imposed on a producer. B) the effect of a positive externality in the production of a good. C) the effect of a negative externality in the production of a good. D) the effect of an external benefit such as a subsidy granted to consumers of a good.