Midterm 1 2006

Midterm 1 2006 - Spring 2006 Name Circle one 10:10 section...

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Spring 2006 Name: __________________________ Circle one: 10:10 section, 11:10 section [4 points] 1/6 Principles of Macroeconomics Midterm 1 You’ll have fifty minutes to complete this exam. Be sure to label all your curves, axes, and (where appropriate) intercepts. If you have any questions during the course of the exam, feel free to ask me. Good luck! In their November 23, 2003 Los Angeles Times article, Abigail Goldman and Nancy Cleeland discuss the mixed blessings Wal-Mart has bestowed on the American economy. Wal-Mart is the world’s largest corporation and is by far the nation’s largest retailer. According to Goldman and Cleeland, it posts twice the sales of General Electric and eight times the sales of Microsoft. However, the giant firm is often criticized for its labor practices. 1) A) Supporters of the retail giant defend Wal-Mart by arguing that, other things being equal, the entry of a new firm into the labor market should increase, not decrease, the equilibrium wage and the equilibrium number of workers employed. Use a labor supply and demand diagram to either support or refute the this claim. You should also include a brief explanation of your answer. [16 points]
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2/6 1) B) Recently, Wal-Mart’s critics have accused the retailer of trying to skirt minimum-wage laws by hiring “independent contractors” to clean its stores. For example, you might imagine that Wal- Mart would agree to pay a contractor $32 for a job that it knows would take the contractor at least eight hours to complete. Since minimum wage rules were originally intended to apply to hourly
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This note was uploaded on 05/13/2010 for the course ECON 323 taught by Professor Jakes during the Spring '10 term at Alcorn State.

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Midterm 1 2006 - Spring 2006 Name Circle one 10:10 section...

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