17. Assume that consumers who shop for single-family homes do not consider condo

Question

17. Assume that consumers who shop for single-family homes do not consider condos. Also assume that consumers who wish to purchase condos do not look at single-family homes. Based on these assumptions we can argue that these are two different markets. A) True B) False 18. If we define unemployment as a surplus of labor, then a minimum wage set above the market-clearing wage will increase the level of unemployment. A) True B) False 19. Technological progress helps increase the productivity of labor, defined as the number of units of output produced per hour of labor. A rise in the productivity of labor in the production process, ceteris paribus, will cause A) the demand for the output to increase B) the demand for the output to decrease. C) the supply of the output to increase D) the supply of the output to decrease. E) None of the above is correct.

Explanation / Answer

17) true

Single family homes and condos are two different markets as buyers see them as different goods.

18) True

Minimum wage increases the wage paid by employers which increases the cost of production. This discourages employers to hire workers. At MINIMUM wage labor supplied is greater than labor demanded. This surplus creates higher unemployment rate.

19. C is correct

Rise in productivity increases output which leads to increase in supply of output.

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