Consider a labor market in which employers discriminate against African Americans. Comparing the labor market equilibrium with no discrimination to the equilibrium with discrimination,
A. The African American wage rate is higher without discrimination than with discrimination.
B. The number of African American workers hired is lower without discrimination than with discrimination.
C. The white wage rate is higher without discrimination than with discrimination.
D. The African American wage rate and the white wage rate are equal with and without discrimination; only the number of workers differs.
Answer: A
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The price elasticity of a vertical demand curve is always
A. infinitely large. B. zero. C. one. D. increasing as price increases.
During a study session for an economics exam with three other students, Peter Daltry commented on an example of a consumer who had to decide on number of slices of pizza and cups of Coca-Cola he would consume
Peter explained that "To maximize his utility this consumer must equate the marginal utility per dollar for pizza and Coca-Cola." Was Peter's analysis correct? A) Peter described one of the conditions necessary for utility maximization. The consumer also must equate the marginal utility of pizza and the marginal utility of cups of Coca-Cola. B) Peter's statement is correct but we must also assume that the consumer is rational. C) Peter describes one of the conditions necessary for utility maximization. The second condition is that total spending on both goods must equal the amount available to be spent. D) Peter's statement is correct.
The difference between the buyer's opportunity cost and the seller's valuation defines the zone of agreement in which the agreement will benefit both parties
Indicate whether the statement is true or false
Price leadership is a form of
A. tacit collusion. B. explicit collusion. C. monopolistic competition. D. a cartel policing mechanism.