Price floors are designed to
A) establish a minimum allowable price.
B) allow free market prices to be achieved.
C) create shortages where none existed before.
D) none of the above.
A
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In the DMP model, a decrease in matching efficiency
A) has no effect on vacancies. B) reduces the unemployment rate. C) increases labor market tightness. D) increases the size of the labor force.
In labor markets, a change in the wage rate has both an income and a substitution effect. An increase in wages causes an increase in real income but at the same time it increases the relative price of leisure for the worker. If an increase in wage rate causes an individual to work less, _____
a. the income effect dominates the substitution effect b. the substitution effect dominates the income effect c. the substitution and income effects cancel each other out d. then leisure will be referred to as an inferior good e. the increase in wage rates will cause an increase in the supply of labor
The recessions of the 1970s are often attributed to an increase in oil prices.
Answer the following statement true (T) or false (F)
The fundamental problem associated with the U.S. health care system is that:
A. the financing of health care through insurance has resulted in the underallocation of resources to the health care industry. B. frivolous malpractice suits have increased malpractice insurance premiums for doctors. C. at the margin, the value of health care services may be less than the value of alternative goods and services. D. there are too many general practitioners and not enough specialists.