Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. Her weekly compensation package is W = 1,000 + 0.4Q, where Q is her dollar volume of sales. Her productivity is Q = 200e + µ, where e denotes her hours of effort and µ, is a random variable with mean 0. If Mary Sue works an additional hour, the expected value of her wages rises by:
A. $80.00.
B. $200.00.
C. $0.00.
D. $1,000.00.
Answer: A
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If the business taxes decreased for a firm, then we might expect investment spending to:
A. remain constant. B. decrease. C. increase. D. there is not enough information to determine what would happen.
Which of the following is true? a. If minimum wage is set below the equilibrium wage, it leads to a labor surplus
b. If anything interferes with the voluntary exchanges that make up a market, equilibrium does not occur. c. Minimum wage helps deal with the problem of unemployment in the market for unskilled labor. d. Producers are willing to employ more labor at a minimum wage. e. Minimum wage leads to a situation of labor deficit in a market.
The federal law prohibiting the sale of organs has resulted in: a. a shortage of organs for transplant
b. exorbitant prices for organs available for transplant. c. more lives saved as a result of transplants. d. a surplus of organs for transplant. e. both a. and b.
Contractionary monetary policy tends to:
A. reduce the interest rate, increase capital inflows, and lower the value of the dollar. B. raise the interest rate, reduce capital inflows, and raise the value of the dollar. C. reduce the interest rate, reduce capital inflows, and lower the value of the dollar. D. raise the interest rate, raise capital inflows, and raise the value of the dollar.