Tag: Economics – Others

QUESTION 7Five firms are currently producing and selling in a market. When two more firms enter the market, economiss expet that

QUESTION 18A monopsonist will maximize profit by purchasing up to the point where:Price = DemandMIC = MRPMR=MCSupply = Dernand

A product with a price elasticity of demand equals one is price, elastic price, inelastic price, and sensitive price unit elastic

a) location of the industry.
b) barriers to entry.
c) extent to which firms can control prices.
d) nature of the industry’s product.

4.Claim: According to the model in the reading, immigration of new workers into the economy will not reduce investment.TrueFalse

Corporations in the U.S. tend to:
Multiple Choice
Minimize taxes.
Underutilize debt.
Rely less on equity financing than they should.

Would more people working from home increase or decrease labor mobility?
A.decrease
B.increase
C.it is not clear
D.it does not matter

Sean​ Astin, who played Sam in the Lord of the Rings​ movies, wrote the following about an earlier film he had appeared​ in:

Prove that a change in the expected price level will shift the Ns curve in the labor market modeled in terms of the nominal wage.
Model setup: let W denote the nominal wage and P
e
the expected price level. The relevant real wage is W / P
e
. Assume labor supply is a function of the real wage,
N
s
= n(W / P
e
)
, with
n’
(·) > 0.
Effect of a change in expected prices at fixed nominal wage: differentiate
N
s
with respect to P
e
holding W constant:
dN
s
/dP
e
= n'(W / P
e
) · d(W / P
e
)/dP
e
= n'(W / P
e
) · (−W / (P
e
)
2
)
.
Since
n’
(·) > 0 and
W/(P
e
)
2
> 0, the derivative is negative. Thus an increase in the expected price level reduces the labor supplied at any given nominal wage: the
N
s
curve shifts downward (or left) when plotted as N versus W.
Equivalent statement in nominal-wage form: invert the supply relation to get the nominal wage needed to deliver a given N,
W = P
e
· n
−1
(N)
.
Differentiating with respect to P
e
at fixed N gives
∂W/∂P
e
= n
−1
(N) > 0
. Therefore, for any target employment level N, a higher expected price level requires a higher nominal wage W; in the W–N plane the supply curve shifts to the right (higher W for each N), which is the same geometric shift described above.
Intuition and conclusion: because workers care about real wages, an increase in expected prices lowers the real wage at a given nominal wage. Workers therefore either supply less labor at that nominal wage or require a higher nominal wage to supply the same labor. Hence a change in the expected price level shifts the Ns curve when the labor market is modeled in terms of the nominal wage.

The relatively stable pattern of intertwined social relationships that develops over time among individuals and groups is called;