Colleges and universities often do not pay salaries that are market-driven. For example, it is typical for a history professor to make the same as an economics professor. What kinds of problems are likely to result from this kind of a pay scale?
What will be an ideal response?
If the salary for the history professor is above the market-clearing level that he or she is likely to earn working anywhere else than that is going to result in an excess of applicants vis-à-vis the number of available positions (i.e. an excess supply of labor). In addition, if the salary paid to economists is lower than the going rate that economists could earn in the private sector then that will lead to a shortage of economics professors (i.e. and excess demand for labor).
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The price elasticity of demand for potatoes is estimated to be -1.3, and the quantity demanded of potatoes is 3,000 bushels per week. In this situation, a 4% rise in the price of potatoes would reduce the quantity demanded by
a. 92 bushels per week. b. 120 bushels per week. c. 156 bushels per week. d. 975 bushels per week.
The production possibilities curve marks the boundary between attainable and unattainable combinations of output
a. True b. False Indicate whether the statement is true or false
Briefly explain how unemployment insurance can stabilize the economy. Give an example.
What will be an ideal response?
Which of the following is least likely to be money?
A. cash or currency B. capital C. a checking account