When will the substitution effect of a wage increase cause a fall in the amount of labor employed?
a. Always.
b. When labor is not a regressive factor.
c. When labor and capital are substitutes in production.
d. When labor and capital are complements in production.
a. Always.
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Sanford wants to start up his own business, and needs $50,000 to get it off the ground. He can either withdraw it from his savings account, where he currently earns 2 percent, or he can take out a loan for $50,000 and pay 2 percent interest. Sanford should compare:
A. the implicit cost of $1,000 to the explicit cost of $51,000 and choose to use his savings. B. the implicit cost of $51,000 to the explicit cost of $1,000 and choose to borrow the money. C. the explicit cost of $1,000 to the implicit cost of $1,000 and realize it will cost the same whether he borrows it or uses his savings for the venture. D. the explicit cost of $1,000 to the implicit cost of $51,000 and choose to borrow the money.
The Treasury also implements monetary policy
Indicate whether the statement is true or false
What are some of the benefits of perfect competition?
What will be an ideal response?
Economic theory suggests that if natural resources can be held as private property, then
A. conservation will be nonexistent. B. people will simply hold them and refuse to make them available. C. owners will have an incentive not to abuse them. D. natural resources will be sold off for immediate use.