Which of the following decreases in labor demand is due to a change in the price of a related resource?
A. A decline in the demand for computers in Europe reduces the demand for workers in the domestic computer industry.
B. The rise of hair salons for both men and women reduces the demand for barbers.
C. A decrease in the educational skills of manufacturing workers decreases the demand for such workers.
D. An increase in the price of chemical equipment increases the cost of producing fertilizer, thus decreasing the demand for workers who make fertilizer.
Ans: D. An increase in the price of chemical equipment increases the cost of producing fertilizer, thus decreasing the demand for workers who make fertilizer.
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
A firm uses two factors of production. Irrespective of how much of each factor is used, both factors always have positive marginal products which imply that
A) isoquants are relevant only in the long run B) isoquants have negative slope C) isoquants are convex D) isoquants can become vertical or horizontal E) none of the above
Panel data estimation can sometimes be used
A) to avoid the problems associated with misspecified functional forms. B) in case the sum of residuals is not zero. C) in the case of omitted variable bias when data on the omitted variable is not available. D) to counter sample selection bias.
Present discounted value refers to the
A. Value today of future payments adjusted for inflation. B. Value today of future payments adjusted for interest accrual. C. Value today of future payments adjusted for risk. D. Future value of today's dollars.