Suppose that the salary range for recent college graduates with a bachelor's degree in economics is $30,000 to $50,000, with 25 percent of jobs offering $30,000 per year, 50 percent offering $40,000 per year and 25 percent offering $50,000 per year and that in all other respects, the jobs are equally satisfying. Assume that in this market, a job offer remains open for only a short time so that continuing to search requires an applicant to reject any current job offer. Moe has just received a job offer that pays $40,000 per year. Moe should:
A. reject the offer if he is risk averse.
B. only accept the offer if he is risk-neutral.
C. reject the offer regardless of his preference for risk.
D. accept the offer if he is risk averse.
Answer: D
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The more inelastic the supply curve in a goods market, the smaller will be the deadweight loss from a per-unit tax in that market.
Answer the following statement true (T) or false (F)
Data from the Bureau of Labor Statistics show that consumer spending on transportation is only slightly higher than consumer spending on food and beverages
a. True b. False Indicate whether the statement is true or false
Suppose Sam's Shoe Co. makes only one kind of shoe, which sells for $50 a pair. If they sold 500,000 pairs of shoes, and had a total cost of $1,000,000, what was the company's profit?
A. $40,000,000 B. $24,000,000 C. $1,500,000 D. Not enough information is given to calculate profit.
It may be unrealistic to assume that consumer tastes are the same across nations and invariant with respect to income:
A. so it is not one of the HO assumptions. B. but it is an HO assumption because it enables the analysis to focus on other issues that drive trade and prices. C. but it actually is true so it is an HO assumption. D. and it is not an HO assumption because consumer tastes within a nation are not relevant to international trade.