Higher education creates
a. side payments
b. negative externalities
c. a wedge between marginal social cost and marginal private cost
d. positive externalities
e. economic efficiency
D
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Refer to Figure 19-7. If the Indian government pegs its currency to the dollar at a value below $.02/rupee, we would say the currency is
A) parity valued. B) overvalued. C) undervalued. D) equilibrium valued.
With the help of a suitable diagram, explain how in a two-country, two-commodity model one of the countries may fail to specialize completely despite enjoying comparative advantage in one of the goods.
What will be an ideal response?
In a labor-market separating equilibrium with high-skill and low-skill workers and where a costly educational degree is used solely as a signal device, government can increase total social welfare by
A) subsidizing school for low-skill workers. B) subsidizing school for all workers. C) eliminating schooling, i.e., banning wasteful signaling. D) subsidizing school for high-skill workers.
If the labor force is 400 and employment is 380, then the unemployment rate is
A. 90%. B. 38%. C. 5%. D. 20%.