In determining wages, ability, effort, and chance
a. probably play no role whatsoever.
b. play a role, but their importance is hard to gauge since ability, effort, and chance are hard to measure.
c. play a role, and that role is fully captured in easy-to-measure factors such as human capital and age.
d. play a role, and it is fully explained within the context of compensating differentials.
b
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"An increase in the real interest rate increases the quantity of investment." Is the previous statement correct or incorrect?
What will be an ideal response?
The traditional view of monopolistic competition holds that this type of industrial structure is inefficient because
a. there are too few firms to reach an efficient level of production. b. firms do not operate at the output that minimizes average costs. c. more advertising is needed to inform customers about product differences. d. consumers do not have enough choice among the product varieties available.