Suppose that differences in skills explain part of the difference in wages by race. Wage differences arising from skill differences:
A. may result from past discrimination in access to education.
B. are not attributable to present or past discrimination.
C. will disappear when labor markets are in equilibrium.
D. are always classified as racial discrimination.
Answer: A
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A. increase; decrease B. decrease; decrease C. increase; not change D. increase; increase
When government levies pollution taxes on sellers to eliminate the inefficiency from the cost of pollution, the result is
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In the figure above, which budget line has the lowest relative price of carrots?
A) AD B) BD C) CD D) The relative price is equal for all three budget lines.
Which type of economic system will produce the highest degree of allocative efficiency?
A. A perfectly competitive market system B. A purely command economic system C. A market system with limited price controls and price ceilings D. A command system with limited market activity for nonessentials