Why is a construction worker never likely to earn as much as a famous athlete?
a. Compensating differentials create a higher wage for professional athletes.
b. Technological progress has advanced less in the construction industry then in sports training.
c. Productivity levels are low in the construction industry due to the high number of people willing to be construction workers.
d. A construction worker can provide his services to only a limited number of customers.
d
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The use of discretionary fiscal policy is hampered by i. difficulty of estimating the level of potential GDP. ii. lack of accuracy of economic forecasts. iii
the small impact tax cuts and increases in government expenditure have on aggregate demand. A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?
What will be an ideal response?
Profits from speculation arise because of
A) the spread between the bid and ask prices on bonds. B) the illiquidity of markets for derivative instruments. C) the high information costs in markets for derivative instruments. D) disagreements among traders about future prices of a commodity or financial instrument.
The long run is a period of
a. at least one year. b. sufficient length to allow a firm to expand output by hiring additional workers. c. sufficient length to allow a firm to alter its plant size and capacity and all other factors of production. d. sufficient length to allow a firm to transform economic losses into economic profits by hiring better workers.