How can bonuses to exceptional employees be considered economic rents?
What will be an ideal response?
The payment for any input can be divided into two parts. The first part is simply the minimum payment needed to acquire the input. If workers do not receive at least this first part, they will not supply their labor. The second part of the payment is a bonus that does not go to every input, but only to inputs of particularly high quality. Payments to workers with exceptional natural skills are a good illustration of the generalized rent concept. Because these bonuses are like the extra payment for a better piece of land, they are called economic rents.
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The expected effects of a tighter monetary policy are
a. lower real interest rates. b. exchange rate depreciation. c. lower inflation. d. All of the above are correct.
Why do economists conduct growth accounting studies? What are the three lessons that commonly emerge from such studies? What is the full recipe for the growth of per capita GDP in an economy?
When a football manufacturer prices its footballs at $120 each, it has 10 footballs in stock at any given time. However, when the footballs are priced at $144 each, the manufacturer is left with 16 footballs in stock at any given time. What is the price elasticity of supply of the football?
a. 2.54 b. 0.39 c. 2.43 d. 0.45
Monetary policy operations for central banks are run through changes in the liability category of:
A. currency. B. government's accounts. C. gold. D. reserves.