Which of the following could not contribute to differences in wage rates across markets?
a. differences in training and education requirements
b. job discrimination
c. differences in risk
d. problems of labor mobility
e. distribution of a new national help-wanted newspaper
E
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
When a nation reduces the barriers to international trade:
A. each individual citizen becomes worse off. B. the total value of all goods and services produced by the nation falls. C. the total value of all goods and serviced produced by the nation rises. D. each individual citizen becomes better off.
The presence of minimal specialized investments relative to contracting costs suggests that the optimal input procurement method is:
A. contract. B. vertical integration or contract. C. spot exchange. D. vertical integration.
Consider a used car market in which half the cars are good and half are bad (lemons). Suppose the average price of a good car is $9,000 and the average price of a lemon is $3,000. If rational buyers are willing to pay $6,000 for a used car, then sellers
will agree to sell mostly lemons at this price. What is the term used to describe this situation? A) moral hazard B) adverse selection C) an efficient market D) economic irrationality