Why do college graduates earn higher wages than non-graduates?
What will be an ideal response?
There are at least two explanations. First is the "learning effect" of college attendance: people who go to college earn more because they acquired valuable skills in college. In addition, the "signaling effect" suggests that individuals can indicate their high ability levels by going to college, a costly signal for low-ability people.
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Refer to Scenario 10.2. Suppose that in addition to the tax, a business license is required to stay in business. The license costs $1000. What happens to profit?
A) It increases by $1000. B) It decreases by $1000. C) It decreases by less than $1000. D) It stays the same.
In 2008, Computers, Inc produced personal computers worth $20 million. If $16 million worth were sold and $4 million worth remained unsold at year end and were added to inventories, how much did Computers, Inc contribute to GDP in 2008?
a. $0 b. $4 million c. $12 million d. $16 million e. $20 million
Which of the following goods is produced in a monopolistic competitive market?
a. Casual dining restaurants b. Electricity c. Apples d. Oil
The price elasticity of demand for many agricultural products is (absolute value) less than 1, meaning that these products are inelastic in demand
Indicate whether the statement is true or false