Which of the following explains why big business typically spends more on rent-seeking activities than consumers?
A. Lobbying is a public good to consumers.
B. Lobbying is a public good to businesses and labor unions in the involved firms.
C. Labor unions in the involved firms.
D. Lobbying is a public good to businesses.
Answer: A
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The length of time before policymakers realize they need to intervene in the economy is called the
A) recognition lag. B) implementation lag. C) impact lag. D) liquidity lag.
In a labor-market pooling equilibrium with high-skill and low-skill workers and where a costly educational degree is used as a signaling device, all else equal, an increase in the wage differential between high- and low-skill workers leads to
A) an increase in the required minimum share of high-skill workers. B) a decrease in the required minimum share of high-skill workers. C) no change in the required minimum share of high-skill workers. D) None of the above answers are correct.