Wage differentials across individual workers are determined in part by
A. effort.
B. social capital.
C. productivity.
D. luck.
E. All of these are determinants of wage differentials.
Answer: E
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In the short run, the fixed costs of a firm:
A. can sometimes be avoided in the short run. B. are irrelevant in deciding whether to shut down production. C. are equal to zero when quantity produced is zero. D. are all the costs it incurs when it produces some positive quantity.
Which of the following is an accurate statement about economists?
a. Economists emphasize all evidence to the same degree. b. Economists who try to be objective usually have some bias in their studies. c. Economists who try to be objective can be value free. d. Economists often base their conclusions on conjecture.
The classical theory of the loanable funds market concluded that
A. Saving and investment would not be equal because of changes in the volume of bank credit. B. An increase in the desire to save would increase the interest rate and lower the volume of investment. C. The interest rate would equate saving and investment and thereby undermine Say's law. D. The interest rate would equate saving and investment and thereby cause Say's law to be valid.
The optimal quantity of air pollution is
A) whatever amount of pollution is produced by the profit maximizing firm. B) found by equating the marginal benefits from further reductions in pollution and the marginal costs of further reductions in pollution. C) found by setting the quantity of air pollution equal to the quantity of water pollution. D) a meaningless concept since monetary values cannot be attached to problems associated with pollution.