econ ch 4
Are markets always in equilibrium?
No, but if there is no outside interference, they tend to move toward equilibrium.
Many states do have ______, which impose an upper limit on the interest rate that lenders can charge.
usury laws
If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages .
will increase
Refer to Table 5-1. If D2 and S2 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are and , respectively.
$10; 12
Refer to Table 5-1. If D1 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are and , respectively.
$4; 16
Refer to Table 5-1. If D2 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are and , respectively.
$8; 15
In 2010, Americans had about outstanding in credit card debts not paid on time.
$900 billion
In the United States, a typical credit card interest rate ranges from ______ per year.
12% to 18%
The United States has approximately ______ credit card holders.
180 million
Refer to Figure 5-1. The movement from ____ to ___ is consistent with a successful advertising campaign that claims wool keeps you warm.
Point A; Point F
Refer to Figure 5-1. The movement from ____ to ____ is consistent with a decrease in the price of cotton (a substitute).
Point A; Point H
Steel mill wage costs increase by 18 percent over a year. What is the likely economic effect on the market for steel?
There is an increase in the cost of producing steel, which shifts the supply curve of steel to the left, thereby increasing the price of steel.
In contrast to goods and services markets, _______ are rare in labor markets, because rules that prevent people from earning income are not politically popular.
price ceilings
Refer to Table 5-1. Suppose that D1 and S2 are the demand and supply schedules for Product A. If the government imposes a price ceiling of $4, then:
a 10 unit shortage will result.
The imposition of a price ceiling on a market often results in:
a shortage
Which of the following results in a rightward shift of the market demand curve for labor?
an increase in demand for the firm's product
Which of the following will not result in a rightward shift of the market supply curve for labor?
an increase in labor productivity
Which of the following will not result in a leftward shift of the market demand curve for labor?
an increase in the wage rate
Many cooks view butter and margarine to be substitutes. If the price of butter rises, then in the market for margarine:
both the equilibrium price and quantity will rise.
Refer to Table 5-1. Suppose that D2 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D2 to D1, then:
equilibrium quantity decreases from 15 to 13.
The labor ______ curve(s) will shift _______ if there is an increase in productivity or an increase in the demand for the final product.
demand; right
Refer to Table 5-1. Suppose that D1 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D1 to D2, then:
equilibrium price increases from $6 to $8
Improvements in the productivity of labor will tend to:
increase wages.
If the demand for software engineers ______ slower than does supply, then wages of software engineers will _______.
increases; fall
The "law of supply" functions in labor markets; that is, a higher for labor leads to a higher quantity of labor supplied.
price
Other things being equal, a ______ supply of workers tends to _______ real wages.
larger; decrease
Since Baltimore passed the first in 1994, several dozen cities enacted similar laws in the late 1990s and into the 2000s.
living wage law
Many economists believe that the trend toward greater wage inequality across the U.S. economy was primarily caused by .
new technologies
A more efficient means of processing algae to produce an anticancer drug is discovered. As a result, the supply curve for the drug will:
shift to the right, decreasing the price of the drug
As the ______ complement for high-skill labor becomes cheaper, the demand curve for high- skill labor will shift to the right.
technology
As the substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left.
technology
Whenever there is a surplus at a particular price, the quantity sold at that price will equal:
the quantity demanded at that price.
When consumers and businesses have greater confidence that they will be able to repay in the future, _______.
the quantity demanded of financial capital at any given interest rate will shift to the right.
Whenever there is a shortage at a particular price, the quantity sold at that price will equal:
the quantity supplied at that price.