In the efficiency wage model with the efficiency wage above the market-clearing wage, the level of employment depends on
A. the intersection of labor supply and labor demand.
B. labor demand alone.
C. labor supply alone.
D. the marginal productivity of capital and the marginal productivity of labor.
Answer: B
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One of the main reasons for increasing income inequality in the United States is __________.
a. contraction in international trade
b. rapid technological change
c. an increase in white collar crimes
How do the Fed's actions influence the inflation rate and how long does it take for inflation to respond to the Fed's policy changes?
What will be an ideal response?
Education is heavily subsidized through public schools and government scholarships. This subsidization of education reflects the fact that
a. a negative externality requires a subsidy to move the market equilibrium closer to the social optimum. b. the social cost of education exceeds the private cost of education. c. the social value of education exceeds the private value of education. d. the market-equilibrium quantity of education exceeds the optimal quantity of education.
In terms of insurance, which of the following statements is explained by adverse selection?
A. A person with riskier characteristics tends to be more likely to buy insurance. B. Insurance companies charge risk-averse customers a higher premium, since they need more peace of mind. C. A person who is more risk-averse tends to be more likely to buy insurance. D. None of these statements is true.