In the Ricardian model, wages are equal across industries because:
a. employers care for their workers.
b. workers prefer to work in exporting industries.
c. workers are freely mobile between industries.
d. workers are freely mobile between countries.
Ans: c. workers are freely mobile between industries.
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In the expanded circular flow diagram, the government supplies
A) factors of production to the factor market. B) goods and services to households. C) factors of production to firms. D) goods and services to the product market.
Explain what economists mean when they characterize the income tax system as progressive
What will be an ideal response?
Predatory pricing: a. occurs when a firm increases price in order to exploit inelastic demand by consumers
b. occurs when a firm prices below average variable cost in order to drive competitors out of the market. c. is difficult to distinguish from vigorous competition in practice. d. is characterized by both (b) and (c).
One of the reasons why the Phillips curve is no longer viewed as a "menu" of possible choices available to policy makers is that
a. in the 1970s and 1980s there was no inflation at all. b. analysis indicates there was no such "menu" in the 1960s. c. in the 1970s and 1980s much inflation came from the supply side. d. economic theory is unable to explain the curve and, therefore, it has been rejected.