Problem Set 3

Problem Set 3 - Problem Set 3 A minimum wage will not cause...

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Problem Set 3 A minimum wage will not cause unemployment if it is
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(a) belo w the equil ibriu m wag e rate. (b) strict ly enfo rced by gove rnm ent offici als. (c) set at a "fair" level , whic h is only $1 abov e the equil ibriu m wag e rate. (d) Non e of the abov e.
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A price floor is established for soybeans above the equilibrium price. At the newly established price,
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(a) the quan tity supp lied will exce ed the quan tity dem ande d. (b) the soyb eans mad e avail able will be ratio ned by the price , so that ther e is neith er a surpl us nor a short age. (c) the quan tity dem ande d will equa
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The price of oysters increases by 14%. As a result, the quantity demanded declines by 27%. The price elasticity of demand for oysters is (a) -14. (b) - 0.92 9. (c) - 1.92 9. (d) zero. The more substitutes there are for an item,
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the high er the cost of the item will be. (b) the less elast ic the dem and will be. (c)
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This note was uploaded on 03/20/2008 for the course EC 205 taught by Professor Hymen during the Spring '08 term at N.C. State.

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Problem Set 3 - Problem Set 3 A minimum wage will not cause...

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