If, as a Result of Imperfect Information, Firms Set Their

question 152

Multiple Choice

If, as a result of imperfect information, firms set their wage rates above the market clearing wage rate,

• A) unemployment decreases.
• B) there will be a surplus of workers.
• C) there will be a shortage of workers.
• D) there will be equilibrium in the labor market.

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Definitions:

Dominant Firm

A company that has a large market share in an industry, allowing it to set prices or conditions under which other firms operate.

Market Equilibrium

A situation where the supply of a good or service is equal to the demand for it, resulting in stable prices.

Homogeneous Products

Goods that are perfectly identical in quality, size, and features, making them indistinguishable to consumers from multiple producers.

Luxury Yachts

Luxury yachts are high-end, luxurious boats that are often equipped with sophisticated amenities and are used for personal or commercial pleasure.