An unanticipated decline in the demand for legal services will
a. increase both the wages of lawyers and the rate of return they can expect to derive from their legal education.
b. lead to a shortage in the market for legal services.
c. reduce the wages of lawyers but not the quantity of legal services supplied.
d. reduce the wages of lawyers and the rate of return on a legal education..
D
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A subsidy is a negative tax
Indicate whether the statement is true or false
Information technologies ________ the demand for low-skilled labor, increase the ________ high-skilled labor, lower the wage rate of ________ labor, and raise the wage rate of ________ labor
A) decrease; demand for; low-skilled; high-skilled B) decrease; supply of; low-skilled; high-skilled C) do not change; supply of; high-skilled; low-skilled D) do not change; demand for; high-skilled; low-skilled
Coase argued that the free market should be able to solve the externality problem without assigning property rights
a. True b. False
The supply curve that monopsonists face is different from the supply curves that firms in competitive labor markets face because with a monopsony,
a. d and e. b. the supply curve of labor is relatively flat. c. offering a wage lower than the market wage means having no workers. d. the employer faces the market supply curve. e. the firm does not take the wage as given.