Lawyers are required to pass a comprehensive bar exam to be licensed to practice law. What effect should this have on the number of lawyers, the wages they receive, and the price people have to pay to receive legal services?
What will be an ideal response?
This is a barrier to entry that will decrease the supply of labor in the legal profession. This will result in higher wages and fewer workers. The prices of legal services will increase as well.
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External costs can be defined as
A) the cost associated with private production, but partially borne by society. B) the sum of all private production costs. C) the cost of running the federal government. D) the cost of providing all public goods and services.
The owner of a perfectly competitive firm is currently earning an economic profit of zero. This owner
A) should shut down since profits of zero are not good. B) should raise the price of the product to increase profits. C) is covering all of his fixed costs. D) will continue producing in the short-run but will shut down in the long run if profits do not increase.
Which of the following is a positive economic statement?
A. We should try to eliminate poverty in the United States. B. If the price of eggs increases, the quantity demanded of eggs will fall. C. Policymakers should strive to eliminate government budget deficits. D. The President of the United States should promote high employment growth in the United States.
In the simple circular flow
A. consumers trade resources for goods and services in the factor market. B. producers trade goods and services for monetary payments in the product market. C. consumers trade goods and services for monetary payments in the factor market. D. businesses trade goods and services for resources in the product market.