A firm will reduce its quantity of labor as long as the MRP of labor ________ the market wage rate.
A. is equal to
B. is greater than or equal to
C. is less than
D. determines
Answer: C
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When people purchase health insurance and then change their behavior after the purchase because the insurance protects them from loss, the health insurance market is said to face the problem of
A) asymmetric information. B) moral hazard. C) adverse selection. D) the rationality paradox.
What is the percentage of income received by the upper quintiles on line L?
Government policies such as price controls, rent controls, and quantity restrictions have the effect of
A) promoting the attainment of an unhindered market equilibrium. B) allowing quantity demanded to adjust to equality with aggregate supply. C) creating excess quantities demanded or excess quantities supplied. D) pushing prices to market clearing levels more rapidly than private market forces.
Which of the following is NOT considered a determinant of income differences?
A. equity or fairness B. productivity C. age D. discrimination