A minimum wage set above the equilibrium wage rate creates
A) efficiency because it increases most workers' wages.
B) efficiency because few workers lose their jobs.
C) efficiency because workers can earn a living wage.
D) inefficiency and a deadweight loss.
E) inefficiency because it creates excessive employment.
D
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Paul goes to Sportsmart to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Paul's consumer surplus from the purchase is
A) $325. B) $200. C) $125. D) $75.
In the late-19th century, farmers blamed their problems on a number of factors. Which of these complaints is supported (somewhat) by quantitative evidence gathered by economic historians?
a. Eastern bankers conspired to inflate interest rates on western farm mortgages. b. Manufacturers charged unreasonably high prices for farm equipment. c. Consumer goods prices were rising too rapidly. d. Certain sections of railroad were monopolized, resulting in unreasonably high freight rates.