Refer to the Graphs Shown

question 85

Multiple Choice

Refer to the graphs shown. If product demand increases from D₁ to D₂, causing the product price to increase, firm A (a supplier of this product) will:

• A) pay a higher wage rate and reduce employment from q2 to q1.
• B) pay a lower wage rate and increase employment from q₃ to q₄.
• C) increase employment because its MRP curve will shift rightward.
• D) decrease employment because its MRP curve will shift leftward.

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Definitions:

Lemon-Law

Consumer protection laws that provide a remedy for purchasers of cars and other consumer goods that fail to meet standards of quality and performance.

Standards of Quality

Established benchmarks that define the specific requirements, specifications, and guidelines to ensure that materials, products, processes, and services are fit for their purpose.

Remedy

A legal means to enforce a right or redress a wrong, such as damages, injunction, or specific performance.

Implied Warranty

A legal assurance, not expressly stated, that a product or service will meet certain quality and performance standards.