Why do college graduates earn more in wages than workers with only a high school diploma?
They have more human capital.
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Fantastic Cuts Hair Salon knows that a 15% increase in the price of their haircuts will result in a 5% decrease in the number of haircuts sold. What is the elasticity of demand facing Fantastic Cuts?
a. 0.05 b. 0.10 c. 0.33 d. 3.0
The prisoners' dilemma is used to illustrate the basic idea that
a. oligopolistic firms would be better off if they collude, but each has an incentive to cheat on the collusive agreement. b. oligopolistic firms are always worse off when they collude. c. oligopolistic firms never have an incentive to cheat on collusive agreements, unlike prisoners. d. students who cheat on economics exams end up in jail.
For levels of disposable income to the left of the point where consumption intersects the 45-degree line
A. Saving is negative. B. Disposable income exceeds consumption. C. Saving equals disposable income. D. Consumption equals disposable income.
Regulation of a natural monopoly that forces it to price and produce as if it were a competitive firm results in
A) the market being instantly competitive. B) higher profits for the monopoly. C) economic losses for the monopoly. D) a highly unstable marketplace.