If income were distributed according to the egalitarian principle of "to each exactly the same," then one problem would be that
A. productivity levels would probably become too high.
B. there would be little or no incentive for individuals to take risky, hazardous, or unpleasant jobs.
C. individuals would have an excess desire to invest in their own human capital.
D. too many individuals would want to take risky jobs.
Answer: B
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Variables X and Y are independent of each other. If we plot X on the horizontal axis and Y on the vertical axis, the line that connects combinations of X and Y in a two-variable diagram is
A) parallel to the horizontal axis. B) downward-sloping (left to right). C) parallel to the vertical axis. D) upward-sloping (left to right). E) a or c
The isoquant mapping for perfect complements in production is
A. a straight line. B. concave. C. L-shaped. D. a ray passing through the origin.
Which of the following does the aggregate expenditure model help explain?
a. price-level changes b. stagflation c. shifts in the aggregate supply curve d. short-run business cycles
In the early 1990s, European unemployment rose largely because of
A) reductions in stock prices. B) undervalued currencies. C) overvalued currencies. D) high inflation. E) none of the above