Why, in the labor market, are contracts often designed to include a variable salary component that is tied to some measure of performance?
A. Firms use such contracts to differentiate between high- and low-quality workers.
B. Such contracts are considered the fairest to employees under fair labor standard laws.
C. Most people are risk-averse and thus variability in their compensation leads to higher total utility.
D. These contracts tend to attract employees with the lowest probability of switching jobs.
Answer: A
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When economists refer to capital, they might mean
a. money b. human skills used in production c. stocks d. bonds e. bank loans
Suppose that 25 units of X and 16 units of Y give a consumer the same satisfaction as 15 units of X and 18 units of Y. Then
A. the consumer can exchange five units of X for one unit of Y and keep utility unchanged. B. the consumer can exchange one unit of X for 1/5 unit of Y and keep utility unchanged. C. the market rate of exchange of X for Y is 1/5. D. both a and b E. all of the above
As a percentage of GDP, the national debt consistently
A. fell from 1950 until 1990. B. fell from 1950 to 1975. C. rose from 1950 to 1960, but not thereafter. D. rose from 1950 to 1975.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point F
A. is efficient and attainable. B. cannot be produced with the current state of technology. C. represents underallocation of resources. D. represents what the people want.