Evidence suggests that education raises the earnings of the workforce mainly by
a. increasing the marginal productivity of labor.
b. keeping young people out of the labor force, thereby reducing the supply of labor.
c. teaching workers how to demand more pay.
d. teaching people to read and write, although education beyond this point does not seem to increase worker productivity.
Ans: a. increasing the marginal productivity of labor.
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As the price level ________, the purchasing power of money ________
A) decreases; stays the same B) increases; decreases C) decreases; decreases D) increases; increases
A national taco chain offers in-house customers free refills on drinks. It is clearly
A) attempting to increase its total profit. B) generating a negative externality. C) generating a positive externality. D) engaging in predatory pricing. E) doing none of the above.
The following figure shows the production-possibility curves of Canada (AB) and the rest of the world (CD). The international price ratio faced by the countries is represented by the line P2. I1 and I2 are community indifference curves for Canada and the rest of the world. In the shift from no trade to free trade, cotton production in the world increases by ________ bale(s) and wheat production increases by ________ bushel(s).
A. zero; three B. one; zero C. zero; one D. twenty-four; nineteen
One important difference between the international economy of today and the economy of 100 years ago is
A) that labor is much more mobile. B) for the first time, technological innovations have reduced the barrier of distance. C) for the first time, capital is mobile. D) the presence of international bodies such as the IMF and World Bank.