In a competitive market with high cost and low cost consumers (where firms are unable to tell consumer types apart), any screening costs incurred by firms will be passed on to low cost consumer but not to high cost consumers.
Answer the following statement true (T) or false (F)
True
Rationale: These costs have to be passed on to consumers because firms have to make zero profit in equilibrium. But they can't be passed on to high cost consumers -- because firms could always offer a price equal to the high MC and make at least zero profit. So they must be passed to low cost consumers.
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The cyclical deficit is the portion of the deficit
A) that would exist if the economy were at full employment. B) that does not add to the national debt. C) that is the result of nondiscretionary federal spending. D) created by fluctuations in real GDP. E) that is the result of discretionary federal spending.
If real GDP is $6,460 billion, the population is 184.6 million people, and aggregate hours is 170 billion hours, labor productivity is
A) $2.63 an hour. B) $2.86 an hour. C) $35,000. D) $38.00 an hour. E) 920 hours.
Figure 2-3
shows the production possibilities frontier for a music processing plant that can produce both compact disks and cassettes. The opportunity cost of moving from point A to point E is
a.
zero
b.
30 cassettes
c.
180 compact disks
d.
cannot be determined because point E is unattainable under current technology and resources
e.
80 cassettes
Division of labor means that
A. the production process is divided into smaller tasks. B. some employees join labor unions and others do not. C. management and labor are always in conflict. D. the labor market in the United States is geographically segmented.