Suppose workers and employers agree to a three-year wage contract under the expectation of 3 percent inflation, but inflation turns out to be 1 percent. In this case, ________ lost purchasing power, and ________ gained purchasing power.
A. no one; employers
B. workers; employers
C. employers; workers
D. employers; no one
Answer: C
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When graphing the per worker production function, ________ is on the horizontal axis and ________ is on the vertical axis
A) labor; real GDP B) the capital stock; real GDP C) the capital-labor ratio; real GDP per worker D) capital per worker; the labor force
Which of the following is not a gain from division of labor?
a. Workers' abilities are matched to tasks. b. Workers gain experience from the repetition of the tasks. c. Workers save time by not moving to different tasks. d. Workers' morale increases as tasks become more specialized. e. The introduction of labor-saving machinery is possible.
A firm can signal the high quality of its product by
a. spending nothing on advertising to convey that the product is so good that the firm does not even need to advertise. b. spending a large amount of money on advertising. c. getting a patent for the product. d. not worrying about getting a patent for the product.
Explain how Coase's theorem is implemented by the Environmental Protection Agency (EPA).
What will be an ideal response?