If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry, what impact would this have on the supply and demand in the market for airline service, assuming no other changes
take place in this market?
A reduction of wages and benefits will shift the supply curve to the right, but will not shift the demand curve. This will decrease the equilibrium price and increase the equilibrium quantity in the market for airline service.
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A situation in which one nation produces good A using labor more intensively (relative to capital) than good B and a second nation, producing good A, uses capital more intensively (relative to labor) than good B is called:
A. a reversal of factor intensities. B. a paradox of factor intensities C. backward technology. D. micro intensity.
When a commercial bank lends $1000 to a customer
A) M1 and M2 decline by $1000. B) M1 and M2 rise by $1000. C) M1 rises but M2 does not change. D) there is no change in M1 or M2 until the loan proceeds are spent.