One way to overcome the problem of adverse selection in labor markets is to
a. use signaling and screening
b. advertise job openings widely
c. contract out the hiring function
d. pay above average wages
e. pay below average wages
D
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If the state enacts the emission charge, find the associated cost savings to the firm, assuming the use of the old technology.
Consider the following abatement cost functions (TACO andMACO) for a firm using an old abatement (AO) technology: TACO = 1000 + 0.25(AO)2 MACO = 0.5(AO), where A isunits of abatement undertaken by the firm, and the cost values are in thousands of dollars. Further assume that the regulatory authority has set an abatement standard (AST) equal to 40 units for each firm and has proposed an emission charge implemented as a constant per unit tax (t) of $10 (i.e., MT = 10), where Total Tax = t(AST – Ai), and Ai is the existing abatement level.
First-degree and second-degree price discrimination are similar in each of the following ways except which one?
A) They both convert consumer surplus into additional economic profit. B) In both practices, firms earn greater economic profit than if they charged a single price for every unit. C) In both practices, consumers pay higher prices for the first units that they buy. D) They both yield the greatest possible profits to the firm.
Investment in health care does bear similarities to investment in human or physical capital
a. True b. False Indicate whether the statement is true or false
A decrease in supply results in a(n)
a. decrease in demand b. increase in equilibrium quantity and a decrease in equilibrium price c. decrease in equilibrium quantity and a decrease in equilibrium price d. increase in demand e. increase in equilibrium price and a decrease in equilibrium quantity