Discuss the likely impact of each of the following on the unemployment rate:
a. The length of time workers are eligible to receive unemployment insurance payments is cut in half.
b. The government passes a law making labor unions illegal.
c. The minimum wage is raised by 50 percent.
d. The government funds an Internet site where companies can post job openings at no charge.
a. The unemployment rate will likely decrease, since decreasing the time people are eligible to receive unemployment benefits will increase the opportunity cost of searching for a job.
b. The unemployment rate will likely decrease, since companies will no longer have to pay above-market union wages and will be able to afford to hire more workers.
c. The unemployment rate will likely increase since an increase in minimum wage will raise the wage above the market wage for some workers.
d. The unemployment rate will likely decrease, since making information on job openings more available lowers the search involved in frictional unemployment.
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Which of the following is NOT an expression for the cost minimizing combination of inputs?
A) MRTS = MPL /MPK B) MPL/w = MPK/r C) MRTS = w/r D) MPL/MPK = w/r E) none of the above
For a perfectly competitive firm,
a. P = AR at all levels of output b. P = AR at the profit-maximizing quantity only c. P > AR at all levels of output d. P < AR at the profit-maximizing quantity only e. P < AR at all levels of output
The problem with the prisoner's dilemma, from the point of view of the police, is that no one is ever convicted
Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
1. The asymmetric information problem in health care implies that the demand for health care is a "supplier-induced demand". 2. The moral hazard problem created by health insurance induces consumers to under consume health care. 3. Health insurance induces the consumers to adopt less prevention and over consumption of health care. 4. The provision of health insurance leads to a dead weight loss due to an over-allocation of resources to health care. 5. Raising deductibles and co-payments in health insurance plans is one effective way to contain health care costs.