Suppose the U.S. government encouraged new teachers to take jobs in underperforming schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying the economic idea that
A) people are rational.
B) people respond to economic incentives.
C) optimal decisions are made at the margin.
D) equity is more important than efficiency.
Answer: B
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The other name for the National Labor Relations Act of 1935 is
A) the Wagner Act. B) the Taft-Hartley Act. C) the Clayton Act. D) the Wheeler-Lea Act.
Two bottles of body wash sit side-by-side in a grocery store: Olay (a brand name) sells for $6.00, while Up and Up (not a brand name) sells for $3.00 . Even defenders of brand names would have to admit that
a. no rational consumer would spend twice as much for Olay as she would for Up and Up. b. the side-by-side presence of these two body washes conveys no useful information to consumers. c. Olay has no incentive to maintain the quality of its product just because of the Olay brand name. d. None of the above is correct.
The production possibilities frontier represents all desirable combinations of two goods
a. True
b. False
Suppose the market for autoworkers is initially in equilibrium, but then suppose the automakers improve working conditions at the plants. What happens in the market for autoworkers?
A. The equilibrium wage rate and the equilibrium quantity of labor will both decrease. B. The equilibrium wage rate and the equilibrium quantity of labor will both increase. C. The equilibrium wage rate will increase and the equilibrium quantity of labor will decrease. D. The equilibrium wage rate will decrease and the equilibrium quantity of labor will increase.