It is argued that competitive markets provide a "natural remedy" to discriminatory wage practices. Which of the following is widely recognized as a potential limit to the potency of that natural remedy?
a. Governments sometimes mandate discriminatory practices.
b. Some employees have a lot of job experience; others have little job experience.
c. In a discriminatory environment, a competitive firm that takes prices and wages as given has nothing to gain from any particular choice it makes regarding who to hire or which customers to serve.
d. Not all firms exhibit social responsibility in sufficient measure to counter discriminatory wage practices.
a
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Suppose the president is successful in passing a $5 billion tax increase. Assume that taxes are fixed, the economy is closed, and the marginal propensity to consume is 0.75. What happens to equilibrium GDP?
A) There is a $20 billion decrease in equilibrium GDP. B) There is a $15 billion decrease in equilibrium GDP. C) There is a $15 billion increase in equilibrium GDP. D) There is a $20 billion increase in equilibrium GDP.
Sam has two jobs, one for the winter and one for the summer. In the winter, he works as a lift attendant at a ski resort where he earns $13 per hour. During the summer, he drives a tour bus around the ski resort, earning $11 per hour. Assume that Sam has an upward-sloping labor supply curve. If the opportunity cost of Sam's leisure time increases, he will respond by working
a. more hours. b. fewer hours. c. an equal number of hours. d. a number of hours that cannot be determined from the information. The labor demand curve is needed to make this determination.
The best method to reduce pollution is
A) to never start polluting. B) to establish private property rights. C) dependent upon the characteristics of the resources and the transaction costs. D) dependent upon the quality of government bureaucrats and the level of greed in the society.
When the price of oysters decreases 25%, quantity demanded is unchanged. The price elasticity of demand for oysters is
A. unitary elastic. B. inelastic. C. elastic. D. perfectly inelastic.