The decision whether to work at any given wage is an application of the
A. scarcity principle.
B. cost-benefit principle.
C. principle of comparative advantage.
D. principle of increasing opportunity cost.
Answer: B
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In the U.S., each additional year of schooling has historically raised a person's wage on average by about
a. 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. b. 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is smaller. c. 5 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger. d. 10 percent. In less developed countries the gap between the wages of educated and uneducated workers is larger.
In the long run, the economy will be near full employment, and crowding out is the stronger force.
Answer the following statement true (T) or false (F)
A firm that is the only seller of a product and is in sole control of a market has a
A) monopoly. B) quantity regulations. C) subsidy. D) public good.
Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?
A) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year, and the actual rate of inflation ends up being 7 percent per year. B) A worker receives a raise in salary that is less than the rate of inflation, because management under-predicted inflation. C) Firms have to hire an extra worker to change prices in its store because of inflation. D) A bank collects a lower amount of interest from a loan because inflation was under-predicted.