According to the economic theory of labor markets, new lawyers are eager to fill clerkships for judges, even at a miniscule wage, because:
a. the clerkship enhances future earnings possibilities.
b. the total utility of nonmarket work and leisure is lower in case of clerkship.
c. the income effect is smaller than the substitution effect for the higher-paying job.
d. the income effect is equal to the substitution effect for the higher-paying job.
a
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Ronny's Pizza House operates in the perfectly competitive local pizza market. If the price of pizza cheese increases (ceteris paribus), what is the expected impact on Ronny's profit-maximizing output decision?
A) Output increases to cover the higher input cost B) Output increases because the marginal cost curve shifts upward C) Output decreases because the marginal cost curve shifts upward D) Output decreases because the price of pizza must also increase
What basket of goods is used to construct the CPI?
a. a random sample of all goods and services produced in the economy b. the goods and services that are typically bought by consumers as determined by government surveys c. only food, clothing, transportation, entertainment, and education d. the least expensive and the most expensive goods and services in each major category of consumer expenditures
U.S. exports:
A. have tended to decrease over time as a percentage of GDP. B. constitute a relatively low share of GDP compared to most other nations. C. make up about 12% of GDP. D. Both A and B are true.
Refer to the above diagram. When AD1 shifts to AD2, real output:
A. increases from Q1 to Q2, while the price level stays the same. B. stays the same, while the price level rises. C. increases from Q1 to Q2, while the price level rises. D. increases from Q1 to Q3, while the price level declines.