A college graduate who works at a firm is also working part-time on a master's degree in business and expects to be paid a higher wage after earning the degree. The basic reason for this wage differential is:
A. Efficiency wages
B. Compensating differences
C. Investment in human capital
D. Nonmonetary aspects of work
C. Investment in human capital
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An indifference diagram has movies on the vertical axis and sodas on the horizontal axis. As the consumption of sodas increases, the marginal rate of substitution ________ and the indifference curve becomes ________
A) falls; flatter B) falls; steeper C) rises; flatter D) rises; steeper
All of the following are programs that redistribute income by making direct payments to people in the lower part of the income distribution EXCEPT
A) social security programs. B) welfare programs. C) Individual Retirement Accounts. D) unemployment compensation.
Using Figure 1 below, if the aggregate demand curve shifts from AD2 to AD3 the result in the long run would be:
A. P1 and Y2.
B. P2 and Y2.
C. P1 and Y1.
D. P4 and Y2.
If the cross-price elasticity of demand between two goods is negative, then
a. the two goods are complements b. the two goods are substitutes c. as price of one good rises, the quantity demanded of the other good also rises d. one of the goods must be inferior e. the two goods are rarely used together by consumers