Recall the Application. If country A has a lower overall income tax rate than country B, and labor can freely and easily move between the two countries, real wages in country A will tend to ________ and employment in country A will tend to ________
A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase
D
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How is the Solow residual measured? What problems arise in its measurement when resource utilization varies over the business cycle? What implications do these measurement issues have for evidence supporting the RBC model?
What will be an ideal response?
One reason that firms hire labor at the point where w = MPN is
A) if w < MPN, the cost (w) of hiring additional workers exceeds the benefits (MPN) of hiring them, so they should hire fewer workers. B) if w > MPN, the cost (w) of hiring additional workers is less than the benefits (MPN) of hiring them, so they should hire more workers. C) if w < MPN, the cost (w) of hiring additional workers equals the benefits (MPN) of hiring them, so they have the right number of workers. D) if w > MPN, the cost (w) of hiring additional workers exceeds the benefits (MPN) of hiring them, so they should hire fewer workers.
The most common type of firm in the United States is the
A) proprietorship. B) partnership. C) corporation. D) limited partnership.
What does an efficient payment scheme in a principal/agent relationship depend on?