Each of the following, except one, can explain why a given job pays a compensating wage differential. Which is the exception?
a. The job requires costly training.
b. The job is dangerous.
c. The job is in a city with a high cost of living.
d. The job requires a very high level of physical exertion.
e. An increase in product demand raises the demand for labor in this job.
E
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All of the following are government purchases except
A) the salary paid to Senator John Cornyn of Texas. B) the presidential pension paid to former President George H.W. Bush. C) the purchase of a new office building for the CIA. D) the purchase of new radar tracking equipment for the Navy.
Problems with the federal government budget process include: a. tough choices to be made by Congress each year on which entitlement programs will receive full support. b. the constitutional requirement of Congress to balance the budget on an annual basis
c. an overly detailed budget that allows Congress to reward friends, thereby discouraging restraint on spending. d. a short review period for Congress that results in poor choices in funding programs. e. Congress having too much control over the budgetary process.
Briefly discuss the role of moral hazard in risk.
What will be an ideal response?
Profit-maximizing firms want to maximize the difference between
A. marginal revenue and marginal cost. B. total revenue and marginal cost. C. marginal revenue and average cost. D. total revenue and total cost.