Which of the following could contribute to a rise in GDP yet may not be economically beneficial?
a. building schools
b. water treatment plant construction
c. tobacco sales
d. airport construction
c. tobacco sales
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Social Security is a pure transfer program because
A) it transfers funds from current workers to the poor. B) the government transfers funds from middle-income workers to welfare recipients. C) current payroll taxes are used to pay the eligible retirees. D) the government subsidizes the medical bill of the poor.
Suppose that Spain has a comparative advantage in hats and Portugal has a comparative advantage in doormats. Under a system of free trade, each country specializes and then trades with the other. If the price starts at four hats per doormat, and then increases to five hats per doormat, then:
a. people in Portugal will not want to buy as many hats. b. Spain no longer has a comparative advantage in hats. c. Portugal is flooding the market with too many doormats. d. some of the gains from trade shift to Portugal. e. some of the gains from trade shift to Spain.
Which of the following statements is correct? a. If unions successfully bargain for higher wages for their union members, employment among union members will increase. b. Wages are higher in nonunion jobs than in union jobs of comparable skill
c. The efficiency wage model asserts that higher wages will lead to higher productivity. d. The imposition of a minimum wage above the market price for unskilled labor creates a shortage of labor.
According to economists who emphasize the connection between productive contribution and economic reward, a more equal income distribution
a. is instrumental to economic growth b. always helps the poor in the long run c. is at the heart of the ethics underlying competitive markets d. creates inefficiency e. may create a bigger GDP, but the individual shares of the GDP are smaller