The higher the cost of acquiring skills, the ________ are the high-skilled and low-skilled labor ________ curves.
A) closer together; demand
B) farther apart; demand
C) closer together; supply
D) farther apart; supply
Ques. 2In the above figure, as Brendan's income rises his consumption bundle moves from point A to point C. This implies that for Brendan, compact discs are ________ good and haircuts are ________ good.
A) a normal; an inferior
B) a normal; a normal
C) an inferior; an inferior
D) an inferior; a normal
Ques. 3Amy has the total utility values given above for DVD rentals a week. Complete the table by calculating her marginal utilities.
What will be an ideal response?
Ques. 4Initially, a perfectly competitive industry that has 1,000 firms is in long-run equilibrium. Then 100 firms in the industry adopt a new technology that reduces the average cost of producing the good.
In the short run, the price ________, firms with the new technology make ________ economic profit, and firms with the old technology ________. A) remains the same; zero; incur economic losses
B) falls; positive; incur economic losses
C) remains the same; positive; make normal profit
D) remains the same; positive; incur economic losses
Ques. 5The above figure shows the market for labor. The employer is a monopsony. The firm will not hire 800 hours of labor because at that point
A) VMP > MCL.
B) VMP = MCL.
C) VMP < MCL.
D) VMP = W.
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