(Consider This) According to the Consider This box "Superstars," the high pay of superstars reflects:
A. elastic product demand.
B. high marginal revenue productivity.
C. blocked occupational entry.
D. warped societal values.
Answer: B
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A farmer uses L units of labor and K units of capital to produce Q units of corn using a production function F(K,L). A production plan that uses K' = L' = 10 to produce Q' units of corn where Q' < F(10, 10 ) is said to be
A) technically feasible and efficient. B) technically unfeasible and efficient. C) technically feasible and inefficient. D) technically unfeasible and inefficient. E) none of the above
The U.S. federal government relies more heavily on ____ than any other government
a. excise taxes b. sales taxes c. customs duties d. income-based taxes
The difference between slope and elasticity is that slope
a. is a ratio of two changes, and elasticity is a ratio of two percentage changes. b. is a ratio of two percentage changes, and elasticity is a ratio of two changes. c. measures changes in quantity demanded more accurately than elasticity. d. None of the above is correct; there is no difference between slope and elasticity.
Judging from the circular flow diagram, what happens to dollars that households earn as wages?
a. They are given to other households in the form of tax distributions.
b. They are given to firms in exchange for capital and labor.
c. They are recycled back to firms when households buy products and services.
d. They are removed from the simple circular flow diagram, making the circle smaller.