Why are most contracts incomplete?
As far as implicit contracts are concerned, at the start of the relationship both parties are aware that the future will almost surely bring changes, and they cannot currently envision how they will react to these changes. If the relationship is worth maintaining they will have to respond to unforeseen events by reformulating the affected parts of their implicit agreement. In case of explicit contracts, usually the range of possible worker tasks is too large, the worker's value in different tasks is hard to determine, and changes in markets and technologies will change the list of possible tasks.
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Define discrimination. Why does discrimination occur, and what evidence exists that it does occur?
What will be an ideal response?
Those who oppose the legalization of cocaine and heroin argue that:
A. addict demand is inelastic, but the demand by occasional users is elastic. B. demand is highly elastic for both addicts and occasional users. C. demand is inelastic for both addicts and occasional users. D. addict demand is elastic, but the demand by occasional users is inelastic.
Which of the following is not an example of a "lag" that diminishes the potential impact of fiscal policy?
A) the data lag B) the recessionary lag C) the legislative lag D) the transmission lag E) None of the above; all are examples of such lags.
As the quantity of labor increases while the amount of other inputs are held constant, marginal product of labor will
A. decrease continuously. B. increase continuously. C. initially decrease and then increase. D. initially increase and then decrease.