Answer:
price floor , binding
price ceiling binding
price floor , non binding
Explanation:
A price floor is when the government or an agency of the government sets the minimum price of a product. A price floor is binding if it is set above equilibrium price.
Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price
Because firms are unable to hire workers due to the minimum wage laws., it means it is binding price floor
Equilibrium price is $3 and the maximum price is $2.70 . Thus, it is a binding price ceiling
Equilibrium price is $3 and the minimum price is $2.70 . Thus, it is a binding floor
Answer:

Explanation:
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Answer:
wages and prices are often inflexible in the downward direction.
Explanation:
John Maynard Keynes was a British economist born on the 5th of June, 1883 in Cambridge, England. He was famous for his brilliant ideas on government economic policy and macroeconomics which is known as the Keynesian theory. He later died on the 23rd of April, 1946 in Sussex, England.
Keynes believed that wages and prices are often inflexible in the downward direction.
In Economics, when there are monetary disturbances and a great level of macroeconomic factors in the economy of a particular country, this usually result in prices of goods and services being sticky.
Answer:
d.$18,900
Explanation:
Gross Profit is the net of Sales value and production cost in the period for the units sold. Under absorption costing all the direct and indirect costs incurred in the production of products are included in the total production cost. As the cost is available for 100 units produced we need to calculate the cost of 90 unit and deduct this cost from the sales value to determine the gross profit and then deduct the operating expenses to calculate the operating income.
Sales (90 units) $90,000
Less: Production costs:
Direct materials ( $40,000 x 90/100 ) $36,000
Direct labor ( 20,000 x 90/100 ) $18,000
Variable factory overhead ( 2,000 x 90/100 ) $1,800
Fixed factory overhead ( 7,000 x 90/100 ) <u>$6,300</u>
Total Production cost <u>($62,100)</u>
Gross Profit $27,900
Less Operating expenses:
Variable operating expenses $8,000
Fixed operating expenses $1,000
<u>($9,000)</u>
Operating Income <u>$18,900</u>
Answer: 0%
Explanation:
Elasticity measures the change in demand resulting from a change in price. The law of demand holds that when prices increase, quantity demand would decrease and elasticity is meant to show the magnitude of this change.
A unit elastic good means that prices and quantity demanded change by the same amount. This means that for a unit elastic good, if the price change is a 5% increase, the quantity demanded will decrease by 5%.
In terms of revenue, if the price increases by the same amount that quantity demanded decreases, the effects will cancel out so there will be no revenue effect.