Firms that employ statistical discrimination in the labor market will earn higher profits in expectation than firms that do not discriminate (and have no effective screens).
Answer the following statement true (T) or false (F)
True
Rationale: Statistical discrimination is about using some information in the absence of full information -- and firms that statistically discriminate will outperform firms that use no information.
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The cost-plus-markup theory of price setting
A) explains why firms can't raise their prices until their costs rise. B) explains why percentage markups vary. C) is consistent with what many sellers say about how they set their prices. D) takes demand into account in explaining relative prices.
Substitution effects help explain the slope of the aggregate demand curve. One substitution effect refers to the
A) inverse relationship between the interest rate and the price level. B) direct relationship between the interest rate and the real value of wealth. C) effect on investment expenditures that result from a change in interest rates produced by a change in the price level. D) change in wealth that results from a change in the interest rate.
Gertrude Stork's Chocolate Shoppe normally employs 4 workers. When the Chocolate Shoppe hired a 5th worker the Shoppe's total output decreased. Therefore
A) the total output of Gertrude Stork's Chocolate Shoppe is negative. B) the average product of the 5th worker is negative. C) the 5th worker should be hired only if he is willing to accept a wage lower than the wage paid to the other 4 workers. D) the marginal product of the 5th worker is negative.
Everything else held constant, an increase in the time deposit ratio will mean ________ in the M2 money multiplier and ________ in the M2 money supply
A) an increase; an increase B) an increase; a decrease C) a decrease; an increase D) a decrease; a decrease