Suppose that the local hospital claims that the wages of nurses are too high. Yet, the hospital has 10 nursing positions open and no applicants for the jobs. Is the hospital's claim legitimate? Why or why not?
What will be an ideal response?
No. Since the quantity of nurses demanded is greater than the quantity supplied, there is a shortage of nurses. Thus, the wage currently paid to nurses must be below the market equilibrium wage.
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With regard to the subject matter of American economic history, Hughes and Cain (2011) suggest that
(a) the presence of the highest living standards known in world history supports the claim that American history is largely a "success story." (b) the American economy is an economy with only successes but no failures. (c) U.S. history provides a fragmented record of problem-solving and problem-producing solutions to the challenges of economic development. (d) there is no link between today's economy and the economy of yesteryear.
Your bike is worth $100 and if you park it outside at school there is a 25% chance that it will be stolen. Your utility function for money is U = 100(M). Assume throughout that the bike value and money are interchangeable since you could sell the bike instantly at its value if necessary. What is the maximum you will pay the campus security for the safekeeping service now?
What will be an ideal response?
Figure 10-6
Given the aggregate demand and aggregate supply curves for the economy depicted in , the economy's current output and price level are
a.
output y1 and price level P2.
b.
output y2 and price level P1.
c.
output y1 and price level P3.
d.
output y2 and price level P3.
When a firm builds a new factory, this is an example of an investment in:
A. human capital. B. the market. C. physical capital. D. research and development.