Free markets produce too little output when
a. negative externalities exist
b. positive externalities exist
c. production uses fixed-production technology
d. production uses variable technology
e. the resource is exhaustible
B
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A labor union is a group of workers and business owners who join together to improve working conditions
a. True b. False
Which situation below would represent a surplus in the fertilizer market?
A. quantity demanded is 1.2 million; quantity supplied is 1.1 million. B. market price $2.00 per bag; equilibrium price $2.25 per bag. C. market price $2.50 per bag; equilibrium price $2.00. D. quantity supplied this year is 25% greater than quantity supplied last year.
According to human capital theory, which of the following is not a reason college graduates earn more than those with only a high school degree?
A. College graduates insist on a financial return on their human investments. B. College graduates are made more productive by their greater training. C. Jobs that require more education must pay higher wages to attract enough workers. D. Income effects are higher for jobs requiring more education.
Firms have an incentive to substitute capital for labor as the
A. price of labor decreases. B. price of capital increases. C. marginal product of labor increases. D. price of labor increases.