What is one potential problem with offering a choice of contracts to two different employees?
A) If Employee A is paid more than Employee B, Employee A might sue for discrimination.
B) Employee A might be paid less than Employee B, proving statistical discrimination.
C) The two employees might compare salaries without comparing risk-preferences, thereby running the risk of jealousy or claims of discrimination.
D) The two employees might compare risk preferences without comparing salaries, thereby running the risk of jealousy or claims of discrimination.
C
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The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up is regulated and follows an average cost pricing rule?
A) acg B) degf C) deg D) There is no deadweight loss.
The income effect results in consumers increasing the quantity of normal goods demanded when the price falls
Indicate whether the statement is true or false
The insight that patterns of trade are primarily determined by international differences in labor productivity was first proposed by
A) Adam Smith. B) David Hume. C) David Ricardo. D) Eli Heckscher. E) Lerner and Samuelson.
If the Fed decreases the required reserve ratio at a time when banks are holding no excess reserves, the Fed is: a. forcing banks to increase the money supply
b. forcing banks to decrease the money supply. c. making it possible for banks to increase the money supply but not forcing them to do so. d. making it possible for banks to decrease the money supply but not forcing them to do so. e. conducting open market operations but not changing the money supply.