Refer to Figure 7.1. Suppose the city passes an ordinance banning loud music, and this directly impacts Angus's legal ability to play his bagpipes. The benevolent social planner would choose an outcome where Angus ________ and Dudley ________
A) plays the bagpipes; does nothing
B) plays the bagpipes; calls the police
C) mops floors; does nothing
D) mops floors; calls the police
A
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When a worker quits a job to look for a better job
A) structural and cyclical unemployment increase. B) structural unemployment decreases. C) cyclical unemployment increases. D) frictional unemployment increases.
The first step in economic analysis is to
a. explore how the equilibrium changes if the constraints change. b. make explicit assumptions about the desirability and the cost of various alternatives. c. apply the equimarginal principle to the problem being considered. d. determine how agents' constraints are interrelated.
Willie's wage increased, and he responded by enjoying more hours of leisure per day. Is Willie's behavior consistent with an upward-sloping labor-supply curve?
A major threat to longer-term profits exists when barriers to entry into an industry are high.
A. True B. False