True/False
Ability, effort, and chance in determining wages are easy to measure.
False
Worker association that bargains with employers over wages and working conditions.
Union
Suppose a person's wage doubled. Would we expect them to work more or less?
The increase in wage leads to a substitution away from leisure, which has become more expensive. It also induces a positive income effect, which causes people to want to consume more leisure and work less.
What are the three most important factors of production?
labor, land, capital
A student who graduated from Harvard University will be offered a higher salary than who graduated from the state university. It is human capital theory.
False
A measure of happiness or satisfaction.
Utility
Major league baseball pitchers earn more than minor league baseball pitchers. What is the reason for such difference in income?
Differences in Natural Ability
A strategy that is best for a player in a game
regardless of the strategies chosen by the
other players
Dominant strategy
Sometimes government provides discriminatory policies.
True
Assistance that takes the form of goods and services rather than cash.
In-kind transfers
College students sometimes work as summer interns for private firms or the government. Many of these positions pay little or nothing a. What is the opportunity cost of taking such a
job?
b. Explain why students are willing to take
these jobs.
1. The wage the student could earn at another job.
2. Students may be willing to take such a job if they acquire valuable skills that increase their productivity . Summer internships enhance a student's resume.
Which type of market is more likely to use the help of advertising?
Monopolistic competition
Life cycle income variation causes inequality in income but not inequality in living standards.
True
The movement of people among income classes.
Economic mobility
Last world cup, there was a huge debate surrounding wages for male and female soccer players. Men were paid significantly more, even though the U.S. National women's team regularly performs far better than the men's team in the tournament. Why might this be the case?
This probably reflects the preferences of viewers, who prefer to watch men play soccer as opposed to women. Such "discrimination" on the part of consumers can lead to wage differentials between groups.
Problem of monopolistic competition in the short run
Other firms can enter the market