A monopsonist that wants to hire more labor must pay more for the new labor than it is currently paying and increase the wage rate of all existing employees because
A) the demand curve for labor is inelastic.
B) of labor unions.
C) the supply of labor is upward sloping.
D) of competition in the labor market.
Answer: C
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Which of the following illustrates government acting as a referee?
a. taxing high income persons b. enforcing contract provisions between buyer and seller c. buying new weapons for defense d. mailing checks to social security recipients e. collecting data on imports and exports
You are the Minister of Trade for a small island country with the following annual PPC:
You are negotiating a trade agreement with a neighboring island with the following annual PPC:
As soon as you see the other island's PPC, you realize there are:
A. no gains from trade because you both have the same comparative advantage. B. gains from trade because your island has a comparative advantage in coconuts. C. no gains from trade because the other island has an absolute advantage. D. no gains from trade because there is no difference in your ability to harvest coconuts.
What is the main problem with government guarantees that socialize losses and privatize gains?
A. They encourage overly risky investments by insulating private investors from any losses. B. The investments that do occur never generate production of goods underproduced by the private sector. C. They discourage private investment in worthwhile projects. D. They tend to benefit foreign companies at the expense of domestic firms.
The foreign exchange system that has the highest foreign exchange risk is
A. the Bretton Woods system. B. the Gold Standard C. the fixed exchange rate. D. the floating exchange rate.