From an economic perspective, the best response to increased wage inequality is to:
A. block future technological change.
B. stop all international trade.
C. make skill-biased technological change illegal.
D. provide transition aid to disadvantaged workers.
Answer: D
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If a perfectly competitive firm adopts a new technology, greater economic profit is possible in the ________, but a competitive return will be earned in the ________ as the market supply will ________.
A) long run; short run; decrease B) short run; long run; increase C) short run; long run; decrease D) long run; short run; increase
Which of the following statements about the optimal solution to the consumer problem based on the Cobb-Douglas utility function is NOT true?
A) The cross-price elasticities of demand are zero. B) Both goods have downward sloping demand curves. C) Both goods are normal goods. D) The marginal utility of income may be negative.
A make -or-buy decision examines whether a manager should incur ________-period costs in order to produce ________ in the ________ period(s).
A) future; inputs; present B) future; outputs; present C) present; inputs; future D) present; outputs; future
When the opportunity cost of producing carrots increases as more carrots are produced, then
a. no more carrots will be produced b. resources are equally suited to the production of carrots and to other goods c. the production possibilities curve shifts inward d. the production possibilities curve shifts outward e. the law of increasing costs is in effect