In high schools, all teachers were paid the same based on years of service and regardless of specialization. Beginning in the 1970s, a shortage of science and math teachers developed as private industry paid more for math and science skills than schools could offer. At the same time, a decline in the number of school-age children tended to reduce the demand for all other teachers, which led to a
surplus. The economist's solution to this problem would be
a. merit pay to reward the best teachers.
b. recognition that all teachers do comparable work and should be paid the same.
c. to raise the wages of all teachers.
d. to raise the wages of teachers in fields that are in short supply and lower those of others.
d
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A decrease in the expected price level shifts short-run aggregate supply to the
a. right, and an increase in the actual price level shifts short-run aggregate supply to the right. b. right, and an increase in the actual price level does not shift short-run aggregate supply. c. left, and an increase in the actual price level shifts short-run aggregate supply to the left. d. left, and an increase in the actual price level does not shift short-run aggregate supply.
The consensus among researchers is that union workers earn 15 percent more than otherwise identical nonunion workers. This means unions have probably raised wages
a. exactly 15 percent. b. less than 15 percent. c. at least 15 percent. d. more or less than 15 percent, but one cannot tell exactly.
If an increase in investment of $100 billion generates an increase of $500 billion in real GDP, the multiplier is
a. 20. b. 50. c. 1.50. d. 5.00.
Leo is a welfare recipient who qualifies for two means-tested cash benefit programs. If he does not earn any income, he receives $225 from each program. For each dollar he earns (which his employer is required to report to the welfare agency), his benefit from each program is reduced by 75 cents until the benefit equals zero. If Leo only values income and not how the income was acquired, then he must earn ________ to be as well off as when he earns nothing and receives benefits.
A. $350 B. $450 C. $225 D. $300