Chapter 4

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 Figure 5-1. The movement from ____ to ___ is consistent with a successful advertising campaign that claims wool keeps you warm.Figure 5-1

Point A; Point F

How do apple growers react to the news of medical research findings that suggest that eating apples leads to greater health benefits than were previously known?

They increase the quantity of apples supplied.

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.

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

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

Whenever there is a surplus at a particular price, the quantity sold at that price will equal:

the quantity demanded at that price.

The "law of supply" functions in labor markets; that is, a higher for labor leads to a higher quantity of labor supplied.

price