Jill is the best eye surgeon in town, and she earns $350,000 a year. Susan is an average eye surgeon in town, and she earns $100,000 a year. Jill's skills as a surgeon
a. are valued more by the market relative to Susan's and that explains why her income is higher than Susan's.
b. are valued less by the market relative to Susan's and that explains why her income is higher than Susan's.
c. are valued less by the market relative to Susan's and that explains why her income is lower than Susan's.
d. are more expensive because she receives a compensating differential.
a
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A permanent reduction in net exports leads to
A) a less than proportional decrease in real Gross Domestic Product (GDP). B) a more than proportional decrease in real Gross Domestic Product (GDP). C) a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP). D) a proportional increase in real Gross Domestic Product (GDP).
A local government would not be efficient in providing which of the following services?
A. International aid B. Police protection C. Fire protection D. Roads
In the diagram above, which of the following could cause a movement from point E' to point E?
A. Japanese residents' incomes rise, so they increase their purchases of U.S. goods. B. The dollar depreciates, inducing Japanese residents to buy more U.S. goods. C. The dollar depreciates, inducing U.S. residents to buy more Japanese goods. D. U.S. residents' incomes rise, so they increase their purchases of Japanese goods.
Answer the following statement(s) true (T) or false (F)
1. In the absence of transactions costs, changes in property rights have no effect on economic efficiency. 2. In the absence of transactions costs, changes in property rights have no effect on the distribution of income. 3. Changes in property rights will not affect the allocation of resources as long as transactions costs are zero and the subsequent effects on market demand are negligible. 4. The weak Coase theorem is true when reallocation of property rights have negligible income effects . 5. According to the Coase Theorem, in the absence of transactions costs, recipients of an external benefit can be expected to offer a bribe in exchange for greater production.