Refer to Figure 17-5 to answer the following questions
a. What is the equilibrium quantity of firefighters hired, and what is the equilibrium wage?
b. What is the equilibrium quantity of paralegals hired, and what is the equilibrium wage?
c. Explain why firefighters might earn a higher weekly wage than paralegals.
d. Suppose that comparable worth legislation is passed, and the government requires that firefighters and paralegals be paid the same wage, $800 per week. Now how many firefighters will be hired and how many paralegals will be hired?
a. 8,000 firefighters at a wage of $1,000 per week.
b. 11,000 paralegals at a wage of $600 per week.
c. The marginal revenue product of the two types of work may differ. There may also be a compensating differential because the work of firefighters is more dangerous than the work of paralegals.
d. 6,000 firefighters and 9,000 paralegals.
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What is one way firms can enforce tie-in sales?
A) One of the goods has no close substitutes. B) contractual arrangements C) information asymmetry D) Any of the above.
Consider a competitive market with a large number of identical firms. The firms in this market do not use any resources that are available only in limited quantities. In long-run equilibrium, market price is determined by
a. the minimum point on the firms' average variable cost curve. b. the minimum point on the firms' average total cost curve. c. the portion of the marginal cost curve below average variable cost. d. a firm's level of sunk costs.