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Question
San Francisco is a beautiful city with great weather. It also has limited real estate, creating a higher cost of living. How do firms account for these two conflicting compensating differentials when determining wages?
a. When in conflict, the cost of living is always the determining factor for wages.
b. The market will reach an equilibrium price that takes both of these factors into consideration while ensuring an adequate supply of necessary labor.
c. Individuals who are attracted to the prospect of living in San Francisco will accept a much lower wage, despite the increased cost of living.
d. In most cases, firms can rely on government-subsidized housing in order to relieve the upward pressure on wages.
e. This conflict produces a wage mismatch, resulting in an economy where certain jobs cannot be staffed.
Answer
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Related questions
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The economic entity most likely to engage in price gouging is
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What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
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What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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b. Prices in the legal market in the community with a binding price ceiling will fall.
c. There will be shortages in the community with a binding price ceiling.
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A(n) ________ in the elasticity of supply or demand in a market for a good that is taxed would tend to ________ who is legally responsible for paying the tax.a. decrease; broaden b. decrease; have no effect on c. increase; broadend. increase; narrowe. increase; have no effect on
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Peanut butter and jelly are complements. If a tax is imposed on peanut butter, how will that affect the market for jelly?
a. Demand for jelly will increase along with the price.
b. Demand for jelly will decrease along with the price.
c. The supply of jelly will increase and the price will decrease.
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e. The supply of jelly will decrease and the price will increase.
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