20. An economic recession with a decline in household incomes will negatively im

Question

20. An economic recession with a decline in household incomes will negatively impact all retail businesses A) True B) False 21. If we assume that the current equilibrium wage for low-skilled labor is $8 per hour and the minimum wage is increased from $5.75 to $7.25 per hour, then A) unemployment among low-skilled workers will increase. B) unemployment among low-skilled workers will remain unaffected. C) unemployment among low-skilled workers will decrease. 22. eBay shoppers are frequently asked by eBay sellers to pay the cost of shipping the purchased item. Who really pays the shipping cost in eBay transactions? A) The buyer B) The seller C) Both parties are likely to share the cost. D) eBay corporation

Explanation / Answer

20. True

Explanation: This will reduce the disposable income of households and sales of retail businesses.

21. B

Explanation: The wage floor is below the equilibrium level. So, this will not be binding and will not affect wage.

22. C

Explanation: The price becomes higher due to the added shipping cost. This reduces quantity demanded and sellers face a revenue loss. So, indirectly, they are too paying a part of the shipping costs.

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