The cost disease of the service sector in recent years is the result of
a. market failure.
b. government intervention.
c. collective bargaining by unions.
d. uneven productivity growth.
d
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Refer to Figure f. A benefit function is plotted in Figure f. The letter B represents the:
A. risk premium of the consumption bundle.
B. expected utility of the consumption bundle.
C. certainty equivalent of the consumption bundle.
D. expected consumption.
Suppose the price of beef declines by $0.50 per pound at the supermarket. Consumers of beef immediately increase their purchases of beef. This illustrates:
a. the fact that beef is an inferior good. b. the cross-elasticity effect of a price decrease. c. the substitution effect of a price decrease. d. the fact that beef is an economic bad. e. the income effect of a rise in price.
In competitive markets:
A) all exchanges take place involuntarily. B) there is only one seller and many buyers. C) prices play a critical role D) there is no provision for the protection of property rights.
A $2.00 increase in the size of a tax on a good will only cause the price for buyers to increase by $2.00 if
A) demand is perfectly inelastic. B) demand is perfectly elastic. C) demand is unit elastic. D) demand is inelastic, but not perfectly inelastic. E) demand is elastic, but not perfectly elastic.