An efficiency wage
A) is higher than the market wage and tends to increase productivity.
B) is lower than the market wage and tends to increase productivity.
C) is higher than the market wage and tends to decrease productivity.
D) is lower than the market wage and tends to decrease productivity.
Answer: A
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Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic. So, imposing a tax on the good results in a ________ in the price paid by buyers and ________ in the equilibrium quantity
A) rise; an increase B) rise; a decrease C) fall; an increase D) fall; a decrease E) rise; no change
Each of the following provides incentives to reduce a negative externality except:
a. a merger with affected firms. b. subsidizing consumption of the good being produced. c. bargaining among firms. d. taxation of the externality.
Given the payoffs in the matrix shown, Firm B:
This prisoner's dilemma game shows the payoffs associated with two firms, A and B, in an oligopoly and their choices to either collude with one another or not.
A. should always choose to collude, regardless of Firm A's actions.
B. should always choose to compete, regardless of Firm A's actions.
C. should compete if Firm A competes and collude if Firm A colludes.
D. should compete if Firm A colludes and collude if Firm A competes.
Supply-siders feel that high levels of government spending:
a. assist private sector investing by creating infrastructure. b. have no impact on private sector investment. c. complement private spending. d. cause private sector investment to decline because of crowding out. e. cause private sector spending to decrease because of increases in corporate taxes to finance the government spending.