In firm X, labor costs are 85 percent of production costs, while in firm Y labor costs are 40 percent of production costs. A 20 percent increase in wages would increase production costs by:
A. 23 percent in firm X and 20 percent in firm Y
B. 19 percent in firm X and 15 percent in firm Y
C. 15 percent in firm X and 6 percent in firm Y
D. 17 percent in firm X and 8 percent in firm Y
D. 17 percent in firm X and 8 percent in firm Y
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The notation for panel data is (Xit, Yit), i = 1, ..., n and t = 1, ..., T because
A) we take into account that the entities included in the panel change over time and are replaced by others. B) the X's represent the observed effects and the Y the omitted fixed effects. C) there are n entities and T time periods. D) n has to be larger than T for the OLS estimator to exist.
If government debt is held internally, the debt burden can be passed on to future generations
Indicate whether the statement is true or false
In one day Madison Laundry washed 4,000 pounds of laundry with 5 workers who each worked 8 hours. What was its productivity?
a. 4000 pounds of laundry b. 500 pounds of laundry per hour c. 100 pounds of laundry per hour d. None of the above is correct.
In an economy in which the skills, preferences, and motivations of workers vary widely, equality of wage rates would
a. reduce the productive incentives of high-skill workers, an effect that would be offset by the increased work effort of low-skill workers. b. be efficient if the wages were fixed at a high enough level. c. lead to shortages and surpluses of resources and the use of involuntary methods of achieving work participation. d. result in a variety of product prices, but overall GDP would be unaffected.