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, all else equal, an increase in the wage differential between high- and low-skill workers leads to
A) an increase in the required minimum share of high-skill workers.
B) a decrease in the required minimum share of high-skill workers.
C) no change in the required minimum share of high-skill workers.
D) None of the above answers are correct.
A
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Risk pooling:
A. assures the individuals that they are less likely to have a catastrophe occur. B. reduces the risk of catastrophes happening collectively to groups. C. doesn't reduce the chances of catastrophes happening to individuals. D. None of these statements is true.
The output level for a perfect price discriminator is found where
a. MR = ATC b. MC = P c. MR = P d. TR = TC e. AR = ATC
If a large percentage increase in the price of a good results in a small percentage reduction in the quantity demanded of the good, demand is said to be
a. horizontal. b. relatively inelastic. c. relatively elastic. d. income proof.
Which of the following resulted from Fed policy that first kept short-term interest rates extremely low during 2002-2004, and then pushed them up substantially during 2005-2006?
a. a reduction in housing prices because variable rate mortgages were unattractive throughout this period b. upward pressure on housing prices when the interest rates were low, but downward pressure on the price of housing as the interest rates rose c. lower default rates on adjustable rate mortgages as the interest rates peaked during 2006 d. downward pressure on housing prices when the interest rates were low, but upward pressure on the price of housing as the interest rates rose