Suppose that the labor market for life guards is initially in equilibrium. Whistles are an important safety tool that life guards use as a part of their jobs. A fire destroys the largest factory that produces whistles. What happens to the equilibrium wage and quantity of life guards?
a. Both the equilibrium wage and quantity increase.
b. Both the equilibrium wage and quantity decrease.
c. The equilibrium wage increases, and the equilibrium quantity decreases.
d. The equilibrium wage decreases, and the equilibrium quantity increases.
b
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The marginal productivity theory of income distribution was developed by
A) William Stanley Jevons. B) George Akerlof. C) John Bates Clark. D) Edward Lazear.
An increase in inflation leads to higher ________
A) output B) spending C) real interest rate D) all of the above E) none of the above
Personal consumption expenditures
a. represent approximately two-thirds of GDP b. are equal to personal income minus individual taxes c. include durable good purchases but not nondurable good purchases d. do not include any intangible consumption items e. include all goods and services bought by the government
Land on both sides of the border of Brazil and Venezuela has long been occupied by the Yanomamo people. These “fierce people” are the last Stone Age tribe left in South America. Following discovery of gold, approximately 45,000 garimpeiros (gold miners) invaded the Yanomamo territory. The mining process pollutes the rivers and scares away game, so traditional Yanomamo sources of food are almost impossible to find now. The Yanomamo are starving. Economists call this problem
A. the cost disease. B. an externality. C. specialization. D. rent seeking.