The above figure shows the supply and demand curves for high-skilled and low-skilled labor. The figure shows that high-skilled workers earn a wage rate greater than low-skilled workers because
A) the supply of high-skilled labor is greater than the supply of low-skilled labor.
B) high-skilled labor has a lower value of marginal product.
C) of both the cost of acquiring skills and the differences in the value of marginal products.
D) of discrimination.
Ques. 2A monopolistically competitive firm can increase its economic profit by ________.
A) developing new products
B) producing at the efficient quantity
C) eliminating excess capacity
D) advertising less
Ques. 3What is game theory and what light does it shed on the issues faced by duopolists?
What will be an ideal response?
Ques. 4If the marginal social cost of a television exceeds the marginal social benefit of a television, it would increase society's total surplus to decrease production of televisions.
Indicate whether the statement is true or false
Ques. 5One positive aspect of rent ceilings is that they help reduce the time and expense associated with apartment hunting.
Indicate whether the statement is true or false
Ques. 6The figure above shows the market for transportation services, which produces an external cost due to the air pollution that is created. The efficient quantity of transportation services is ________ and the corresponding price is ________.
A) 120; 14
B) 120; 8
C) 80; 12
D) 80; 6
Ques. 7Friedmania is a country in which the quantity theory of money operates. The country has a constant population, capital stock, and technology so real GDP does not change.
In 2014, real GDP was 500 million, the price level, measured by the GDP deflator, was 150 and the velocity of circulation of money was 10. (Because the price level is measured by the GDP deflator, it must be divided by 100 before it is used in the equation of exchange.) In 2015, the quantity of money increased by 20 percent. a) What was the quantity of money in 2014? b) What was the velocity of circulation in 2015? c) What was the price level in 2015?
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