Moe and Curley have identical skills. Their jobs are identical, except Moe's job provides more on-the-job training experiences than does Curley's job. Who will have the higher observed wage rate?
a. Moe's wage rate will be higher than Curley's.
b. Curley's wage rate will be higher than Moe's.
c. Moe and Curley will be paid the same wage rate.
d. There is insufficient information to determine who will be paid the higher wage.
b. Curley's wage rate will be higher than Moe's.
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A recession is commonly defined as occurring when
A) real GDP decreases for a period of 12 or more months. B) real GDP decreases for a period of 6 or more months. C) the unemployment rate rises above 7.5 percent for 6 or more months. D) the unemployment rate rises above 5.0 percent for 12 or more months.
A stand-by letter of credit issued by a bank is __________ of that bank
A) an asset B) a liability C) technically both an asset and a liability D) neither an asset nor a liability
One common mistake in applying the demand and supply framework is to confuse:
a. the shift of a demand or supply curve with movement along a demand or supply curve. b. whether the supply or demand curve is impacted by the change. c. the increase in demand with a shift in the supply curve. d. the increase in supply with a shift in the demand curve.
Mrs. Smith is operating a firm in a competitive market. The market price is $6.50 . At her profit-maximizing level of output, her average total cost of production is $7.00, and her average variable cost of production is $6.00 . Which of the following statements about Mrs. Smith's firm is correct?
a. Mrs. Smith is earning a loss and should shut down in the short run. b. Mrs. Smith is earning a loss but should continue to operate in the short run. c. Mrs. Smith is earning a profit since the price is above the average variable cost. d. Without knowing Mrs. Smith's marginal cost, we cannot determine whether she should stay in business or shut down.