One theory that predicts sustained wage and rent differentials is based on the idea that your accumulation of human capital raises the productivity of the other workers and the physical capital in your locale. In this situation, human capital accumulation creates
a. a signaling equilibrium.
b. external benefits.
c. compensating differentials.
d. intertemporal substitutions.
b. external benefits.
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Explain why a subsidy will not solve the problem of producing less than is socially optimal of a pure public good
Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch.
If before Tracy chose, Amy could make a credible commitment to choose either the top or bottom branch when her turn came, then Amy would commit to the ________ branch and Tracy would choose the ________ branch.
A. bottom; top B. top; bottom C. top; top D. bottom; bottom
The concentration and HHI reported in the U.S. Bureau of Census must be interpreted with caution since:
A. the definition of product classes used to define an industry affects the results. B. they are based on figures for the entire national market. C. they are calculated by excluding foreign imports, hence they bias upward the degree of concentration. D. All of the answers are correct.
If the market price of a DVD is $15 and a consumer was willing to pay $20 for it, that consumers surplus on the DVD is $5.
Answer the following statement true (T) or false (F)