Ability bias can arise when estimating compensating wage differentials associated with various job characteristics. What is ability bias in this context?
A. High-skilled workers are likely to have higher wages than unskilled workers but to have worse job amenities.
B. High-skilled workers are likely to have higher wages than unskilled workers, but they are also likely to trade some of their higher wages for better job amenities.
C. High-skilled workers are likely to have lower wages than unskilled workers but to have better job amenities.
D. Low-skilled workers are likely to have low wages but good job amenities.
E. High-skilled workers are likely to have high wages but poor job amenities.
Answer: B
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Which of the following is classified as an intermediate good?
i. the purchase of a Big Mac by a college student ii. McDonald's purchase of pickles iii. a McDonald's restaurant owner's interest payment for the loan on her building A) ii only B) ii and iii C) i and iii D) i only E) i, ii and iii
Unanticipated inflation is associated with cost increases which are not expected
Indicate whether the statement is true or false
Refer to Table 2-20. Thailand has a comparative advantage in the production of
A) wristwatches. B) rice. C) both products. D) neither product.
If the wage rate doesn't change but a profit-maximizing competitive firm hires fewer workers, we know that
A) the price of the product increased. B) technical change occurred that increased labor productivity, reducing the firm's demand for labor. C) demand for the product fell or there has been a reduction in labor productivity. D) marginal factor cost increased.