"The typical age-earning cycle provides evidence of economic discrimination by age." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. The typical age-earning cycle starts with a low income, builds gradually to a peak at around age 50, and then gradually drops until it approaches zero at retirement. The variations of earning by age, however, reflect many economic factors other than age, including work experience and productivity, and the number of hours per week that are worked. Therefore, the age-earning cycle alone is not evidence of age discrimination.
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The market price of physical capital is $10 and the market wage rate is $5. If a firm is optimally hiring an additional unit of physical capital, the value of the marginal product of physical capital is:
A) $1. B) $2. C) $10. D) $50.
From the date a U.S. patent is granted to a firm, it ceases to be a potential source of monopoly profits after
A) 20 years. B) 14 years. C) 10 years. D) 7 years.
Suppose the production function for coffee (C) is C = min(B,W), where B = beans in pounds and W = water in gallons. Suppose the price of water is $.10 per gallon and the price of beans is $10 per pound. The cost minimizing combination of beans and water for C = 200 is
a. B = 200, W = 2000 b. B = 2000, W = 200 c. B = 100, W = 100 d. B = 200, W = 200
Which of the following goods is least likely to be provided by the private sector?
a. a good characterized by nonrivalry in consumption from which nonpaying customers can be excluded b. a good characterized by nonrivalry in consumption from which paying customers cannot be excluded c. a good characterized by rivalry in consumption from which nonpaying customers can be excluded d. a good for which the marginal private benefit to an individual exceeds the marginal cost of producing the good