A minimum wage in the formal sector will likely
a. reduce the number of formal-sector workers
b. increase labor supply and lower wages in the informal sector
c. encourage rural-urban migration
d. lead to increased mechanization in the formal sector
e. all of the above
E
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Refer to the scenario above. If the government removes the ban on Firm B and both Firm A and firm B aim at maximizing profits:
A) marginal cost of Firm A will eventually be greater than the marginal cost of Firm B. B) marginal cost of Firm B will eventually be greater than the marginal cost of Firm A. C) marginal cost of both firms will eventually be equalized. D) the difference in the marginal cost of both firms will eventually increase.
Joe fishes for swordfish at a cost of $6 per ton. Ronny fishes at a cost of $4 per ton. Both have one 1000 ITQ and the current market price is $10 per ton. If Joe sold his ITQ to Ronny for $7000, he and Ronny would:
A. Make the sale because they're both better off B. Not make the sale because Joe is better off and Ronny is not C. Not make the sale because Ronny is better of and Joe is not D. Not make the sale because neither is better off