Who is more likely to drive carelessly, Camila in her 1980 Ford with bad brakes or Samantha, who has a 2005 BMW with all the most recent safety options?
On the surface, we might conclude that Samantha will be more careful since she appears to have more to lose (a higher priced car), but insurance likely will cover any monetary loss. Most people value their life and health more than material possessions; because of this, we expect Camila to be more careful due to her unsafe car. Samantha can afford to take more risks since her car is in better condition and has the latest safety features.
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If workers are homogeneous and face a monopsonist,
A) they are likely to want to form a union. B) they are likely to want to negotiate one-on-one with their employer. C) it is likely that half will want to form a union, half will not. D) they are likely to move to another town.
McDonald's is a fast-food restaurant chain. Which of the following would be a long-run decision for McDonald's?
A) open a new restaurant in a city B) hire one more worker in a restaurant location C) supply more hamburgers in one restaurant D) replace the manager of a restaurant