An add in the newspaper claims that the price of milk will increase next week. At the same time, a new and improved pasteurization process makes milk production more efficient. Given these two effects, what can we say about the current equilibrium price and quantity of milk? a. Equilibrium quantity will increase; the effect on price is ambiguous. b. Equilibrium price will increase; the effect on quantity is ambiguous. c. Equilibrium price will decrease; the effect on quantity is ambiguous. d. Equilibrium quantity will decrease, equilibrium price will increase.

Suppose a firm faces a fixed price of output, 푝푝= 1200. the firm hires workers from a union at a daily wage, 푤푤, to produce output according to the production function 푞푞= 2퐸퐸12. there are 225 workers in the union. any union worker who does not work for this firm is guaranteed to find nonunion employment at a wage of $96 per day. a. what is the firm’s labor demand function? b. if the firm is allowed to choose 푤푤, but then the union decides how many workers to provide (up to 225) at that wage, what wage will the firm set? how many workers will the union provide? what is the firm’s output and profit? what is the total income of the 225 union workers? c. now suppose that the union sets the wage, but the firm decides how many workers to hire at that wage (up to 225). what wage will the union set to maximize the total income of all 225 workers? how many workers will the firm hire? what is the firm’s output and profit? what is the total income of the 225 union workers? [hint: to maximize total income of union, take the first order condition with respect to w and set equal to 0.]

Which of the following best explains how trade enables greater specialization among producers? a. trade diversifies the market by bringing specialized goods from around the world. b. trade requires distribution networks and adds one more step to the production process. c. trade enables producers to open up new markets for their goods and services. d. trade allows people to focus on one kind of production and trade for their other needs.

When watching the video example 87: function notation, the presenter states that we need to, "go to this function and in the place of x, we will put in " â4 â3 â2 â1?