If the best lawyer in town is also the best at operating a word processor, then according to economic reasoning, this person should
A) split her time evenly between being a lawyer and a word processor.
B) specialize in being a word processor because it is more capital-intensive.
C) specialize in being a lawyer because its opportunity cost is lower.
D) should pursue the activity she enjoys more.
C
Economics
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If the government provides a subsidy of $1 per hour to employers for hiring workers, ________
A) the equilibrium real wage will increase B) labor demand will decrease C) the equilibrium employment will decrease D) labor supply will increase
Economics
Appendix: When two or more "independent" variables are highly correlated, then we have:
a. the identification problem b. multicollinearity c. autocorrelation d. heteroscedasticity e. complementary products
Economics