11) Prices for industrial commodities such as steel rods or machine tools are A) heavy prices. B) sticky prices. C) auction prices. D) custom prices. 12) If prices are sticky A) economic activity will be coordinated efficiently. B) economic activity will not be coordinated efficiently. C) prices will quickly adjust to changes in demand. D) quantity supplied will always equal quantity demand. 13) Workers often have ________ contracts and so their wages are ________. A) long-term; flexible B) long-term; sticky C) short-term; sticky D) short-term; flexible 14) Stickiness of wages A) is unrelated to stickiness of prices. B) lessens the stickiness of prices. C) reinforces stickiness of prices. D) may or may not reinforce stickiness of prices. 15) The economy’s ability to coordinate economic activity is hindered by A) sticky wages causing sticky prices. B) auction prices. C) workers whose wages change quickly. D) all of the above 16) Workers whose wages tend to adjust slowly include all of the following EXCEPT A) union workers. B) unskilled low wage workers. C) those with long-term contracts. D) movie stars professional athletes and rock stars. 17) Which of the following types of workers might have wages that change quickly? A) unskilled low-wage workers B) union workers C) employees of state and local governments D) movie stars and rock stars 18) In which market would the price be least likely to be “sticky?” A) refrigerators B) steel rods C) fresh fruit D) trucks 19) Suppose the demand for hot dogs decreases. In the short run firms that produce hot dogs will experience a fall in prices which will induce them to A) increase production and increase the number of workers. B) decrease production and increase the number of workers. C) decrease production and reduce the number of workers. D) increase production and reduce the number of workers. 20) Suppose the demand for hamburgers increases. In the short run firms that produce hamburgers will experience a rise in prices which will induce them to A) decrease production and decrease the number of workers. B) increase production and increase the number of workers. C) decrease production and increase the number of workers. D) increase production and decrease the number of workers.
