C5Practice

C5Practice - PRACTICE QUESTIONS FOR CHAPTER 5 True-False...

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PRACTICE QUESTIONS FOR CHAPTER 5 True-False Questions: 1. A firm that hires workers to maximize profits will also maximize labor productivity. Answer: False 2. If the demand for labor is price inelastic and the minimum wage exceeds the competitive equilibrium wage, an increase in the minimum wage will increase the total wages of employed workers. Answer: True 3. A price ceiling that is lower than the competitive equilibrium price will cause excess supply. Answer: False Multiple Choice Questions: 4. Ed's bakery can sell as many loaves of bread as it wishes for a price of $2 per loaf. To keep calculations simple, let us assume that Ed's only costs are hired labor. If Ed hires 1 worker, he can produce 200 loaves of bread per day. If Ed hires 2 workers, he can produce 350 loaves of bread per day. If he hires 3 workers, he can produce 450 loaves of bread per day. If he hires 4 workers, he can produce 480 loaves of bread per day. If he hires 5 workers, he can produce 500 loaves of bread per day, and if he hires 6 workers, he can produce 510 loaves of bread per day. If he hires 7 or more
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C5Practice - PRACTICE QUESTIONS FOR CHAPTER 5 True-False...

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