A microeconomic analysis shows that in a competitive economy in which labor is homogenous and mobile, the ratio of the prices of the products in equilibrium is inversely proportional to:
a. the ratio of the capital used in production.
b. the ratio of the marginal products of labor.
c. the geographical region of the country in which the factory is located.
d. the strength of bargaining power of the workers.
Ans: b. the ratio of the marginal products of labor.
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The above figure shows the labor market in an undeveloped nation. If the minimum wage is set at $5.00 per hour, what effect will it have on the market for low-skilled labor?
A) The minimum wage will have no effect when set above the equilibrium wage rate. B) The minimum wage will create a surplus of low-skilled labor. C) The minimum wage will create a shortage of low-skilled labor. D) The minimum wage will attract more labor to the low-skilled labor market and cause the wage rate to fall.
The probability of an outcome
A) is the number of times that the outcome occurs in the long run. B) equals M × N, where M is the number of occurrences and N is the population size. C) is the proportion of times that the outcome occurs in the long run. D) equals the sample mean divided by the sample standard deviation.