In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device,
A) the high-skill workers' wage is larger than the low-skill workers' wage.
B) the low-skill workers' wage is zero.
C) the high- and low-skill workers receive the same wage.
D) the high-skill workers' wage is equal to the low-skill workers' wage plus the cost of obtaining a degree.
C
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Economic profit
A. can be calculated by subtracting implicit costs of using owner-supplied resources from the firm's total revenue. B. is negative when total costs exceed total revenues. C. is a theoretical measure of a firm's performance and has little value in real world decision making. D. is generally larger than accounting profit.
Which of the following statements regarding accounting and economic profits is FALSE?
A. Economic profits = total revenue - (explicit + implicit costs) B. Economic profits can be zero even if accounting profits are positive. C. Accounting profits can be negative if economic profits are positive. D. Accounting profits = total revenue - explicit costs
Assume leisure is an inferior good instead of a normal good. The income effect of a wage increase will lead to a ________ demand for leisure and a ________ labor supply.
A. higher; lower B. higher; higher C. lower; lower D. lower; higher
Assume Cathy's Cupcake Company operates in a perfectly competitive market producing 10,000 cupcakes per day. At this output level, price exceeds the firm's marginal and average variable costs. It follows that producing one more cupcake will cause this firm's
A. profits to remain unchanged. B. total cost to decrease. C. profits to increase. D. profits to decrease.