Explain the term "labor hoarding."
What will be an ideal response?
Sometimes, a fall in the unemployment rate is delayed by a year or more after the growth rate of real GDP picks up at the end of a recession. This delay occurs for several reasons, but the most important one is labor hoarding. Since recruiting workers and training them is costly, firms may not want to lay off qualified workers during a temporary slowdown. During a recession some firms will reduce the hours of their workers or even pay those workers to come to jobs at which little gets done, rather than laying the workers off. When the economy recovers and these firms increase production, they will not initially need to hire new workers because they can start to ramp up production by fully utilizing the workers they hoarded during the contraction.
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Which answer ranks the elasticities of supply from highest to lowest?
a. market-day, short-run, long-run b. short-run, long-run, market-day c. long-run, short-run, market-day d. short-run, market-day, long-run e. long-run, market-day, short-run
Which of the following represents a difficulty related to setting the national poverty line in the United States?
a. Many people around the world are poorer than Americans. b. It is impossible to distinguish the poverty line from the poverty rate. c. Social programs mean that nobody in the United States is living in poverty. d. Median income and cost of living vary in different parts of the country.
Exhibit 3-5 Supply for Tucker's Cola Data Quantity supplied per week(millions of gallons) Price pergallon 6 $3.00 5 2.50 4 2.00 3 1.50 2 1.00 1 .50 Exhibit 3-5 shows the supply schedule for Tucker's Cola. Suppose there are four additional suppliers of cola in the market. When the price per gallon of cola is $1.50, the first supplier is willing to sell 10 million gallons, the second supplier is willing to sell 2 million gallons, the third supplier is willing to sell 5 million gallons, and the fourth supplier is willing to sell 0 gallons. The market quantity supplied of cola when the price is $1.50 is
A. 17 million gallons. B. 20 million gallons. C. 30 million gallons. D. 0 gallons.
In order to correct the problems associated with external costs,
A. standards must be established that make it illegal to pollute. B. the government must take over production of industries that are responsible for most of the pollution. C. the signals given to the economy must change so that decision-makers will take into account all the costs of their actions. D. the prices of all goods must be raised so people will consume less of the world's resources.