When oil prices increased to record levels in the 1970s, salaries dramatically increased for petroleum geologists skilled in finding oil. Those geologists who moved from other areas to the higher paying jobs were
a. seeking to profit from society's needs rather than following the guidance of the invisible hand, which would have led them to seek jobs serving society rather than jobs with higher pay.
b. following the guidance of the invisible hand and probably serving society's best interests as well as their own.
c. causing oil prices to rise even more by moving to jobs with higher salaries.
d. helping themselves but hurting the economy.
B
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When the Fed lowers the target rate of interest for federal funds, it
A) buys government bonds. B) lowers the discount rate. C) sells government bonds. D) lowers the required reserve ratio.
Calculate the firm's total profit.
Refer to Scenario 7.1 below to answer the question(s) that follow. SCENARIO 7.1: You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. Refer to Scenario 7.1. A yearly normal return for your computer software firm would be
A. $20,000. B. $40,000. C. $60,000. D. $100,000.
Financial intermediaries are
a. the same as financial markets. b. individuals who make profits by buying a stock low and selling it high. c. a more general name for financial assets such as stocks, bonds, and checking accounts. d. financial institutions through which savers can indirectly provide funds to borrowers.