Why do skilled workers earn relatively higher wages than unskilled workers?
a. The marginal productivity of skilled workers is low.
b. The marginal cost of hiring skilled workers is low.
c. The supply of skilled workers is relatively less.
d. There is an abundant supply of skilled workers.
e. The marginal cost of hiring unskilled workers is high.
QUESTION 2Peanut butter and jelly are:
a. substitutes and have a positive cross-price elasticity of demand.
b. complements and have a positive cross-price elasticity of demand.
c. substitutes and have a positive cross-price elasticity of demand.
d. complements and have a negative cross-price elasticity of demand.
e. inferior goods when the income elasticity of demand is positive.
QUESTION 3Explain the concept of utility.
QUESTION 4Which of the following refers to human capital?
a. Money spent by business to acquire labor
b. The acquired skill and productivity of workers
c. The plant and equipment used with labor
d. Money spent on purchasing the latest machinery
e. Money that workers save
QUESTION 5When the cross-price elasticity of demand for two goods is a positive number, one can correctly conclude that:
a. the goods are normal goods.
b. the goods are inferior goods.
c. the goods are substitutes.
d. the goods are complements.
e. total revenue will increase when the price increases.
QUESTION 6Use the concept of diminishing marginal utility to explain why we would be more likely to see an all you can eat pizza buffet rather than an all you can carry sunglass buffet.
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