The labor supply curve facing an individual employer in a perfectly competitive labor market is:
a. upward sloping.
b. downward sloping.
c. horizontal.
d. greater than MFC.
e. the MRP curve.
c
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Graph the MSB and MSC functions on the same diagram. Show the regionally-based set of standards (ALA and AREMAINDER) that should be recommended to achieve allocative efficiency in each region. Find the numerical value of each standard.
Los Angeles County has the worst urban air quality across all major metropolitan areas in the United States. Automobile emissions contribute significantly to this problem. Assume the California Air Resources Board is consideringwhether to set a uniform emission standard or a regionally-based emission standard, where one standard is set for Los Angeles County and another for the rest of the state. Marginal social benefits (MSB) and marginal social costs (MSC) for the two regions have been estimated as follows: MSBabatement in LA County = 500 ?0.75A MSBabatement in the rest of California = 150 ? 0.25A MSCabatementin all of California = 0.5A, where A is the level of abatement of automobile emissions, and MSB and MSC are in millions of dollars.
If a monopolist is maximizing profits, then it is producing an amount of output so that
A) MR = ATC. B) MC = AVC. C) MR = TC. D) MR = MC.
The adverse selection of wage cuts argument points out that:
a. employers will try to keep wages from falling when the economy is weak or the business is having trouble, and employees will not expect huge salary increases when the economy or the business is strong. b. the productivity of workers will increase if they are paid more, and so employers will often find it worthwhile to pay their employees somewhat more than market conditions might dictate. c. if an employer reacts to poor business conditions by reducing wages for all workers, then the best workers with the best employment alternatives at other firms are more likely to leave, while the least attractive workers, with fewer employment alternatives, are more likely to stay. d. those already working for firms are "insiders," while new employees, at least for a time, are "outsiders.".
Which of the following functions are performed by changes in relative prices but not by changes in average prices?
A. Computing real income from nominal income. B. Indicating an overheating economy. C. Measuring the rates of inflation. D. Signaling changes in the desired mix of output.