What role might contests among superstars play in accounting for income inequality?
What will be an ideal response?
Contests can explain why the super-rich have incomes that have increased greatly over the years. With increased globalization, the pool of "contestants" has increased dramatically. With the larger number of conspiracy, each contestant's probability of winning has shrunk. So contests need to have larger differences in payouts for the winners versus the losers so as to induce larger efforts to win the contest. The result is that the contest winners—be they sports stars, entertainment stars, of CEOs—nowadays have much larger incomes than the vast number of losers.
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In the auto industry, abatement costs to combat global warming
a. will be unaffected by recent standards on GHG emissions b. should not affect vehicle prices c. are expected to raise vehicle prices but these costs should be offset by fuel savings d. none of the above
The above table shows the short-run total product schedule for the campus book store. At what levels of books sold per hour will the marginal product of labor be greater than the average product of labor?
A) 40 books sold per hour B) 73 books sold per hour C) Both A and B are correct. D) Neither A nor B is correct.
Household income is spent on all of the following except one. Which is the exception?
a. services b. tax payments c. durable goods d. nondurable goods e. dividends
Summarize how the law of demand explains the effects of price on the quantity demanded
What will be an ideal response?