The morel is a prized mushroom that is often abundant in the Western United States in years after forest fires. Suppose two companies are buying morels from workers willing to find them. One company offers to pay workers $5.00 per pound, and the other company will pay workers only $4.00 per pound. Economists would say that:
A. the higher-paying company will attract the more creative and innovative pickers and the lower-paying company will attract the others.
B. the lower-paying company will attract the more creative and innovative pickers and the higher-paying company will attract the others.
C. the company willing to pay only $4.00 has a comparative advantage in selling morels.
D. this situation violates the law of one price and is not likely to persist.
Answer: D
You might also like to view...
When technology spillover occurs,
a. it is the government's responsibility to own firms that are engaged in high-tech research. b. a firm's research yields technological knowledge that can then be used by society as a whole. c. those firms engaged in technology research should be taxed by the government. d. firms invest in the latest production technology and the cost of that technology "spills over" to the prices consumers must pay for the product.
What are two reasons why employees would prefer for their employer to pay for their health insurance rather than receiving increased wages and paying for their own health insurance?
What will be an ideal response?