Suppose that the country of Libraria made a concerted effort to increase the educational level of its people. If this effort had no effect on the wages of its workers, one might consider this as evidence in support of
a. the human-capital view of education.
b. the signaling view of education.
c. both the human-capital and the signaling view of education.
d. neither the human-capital nor the signaling view of education.
b
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In the fooling model's labor market diagram, from an initial intersection point of the labor supply and demand curves, tracing "southwest" down the labor supply curve shows
A) what happens to real wages and employment when aggregate demand expands. B) what happens to real wages and employment when aggregate demand contracts. C) what workers think is happening to real wages if an aggregate demand contraction fools them. D) what firms think is happening to real wages if an aggregate demand expansion fools them.
Suppose that an individual consumes just two goods: Big Macs and milkshakes. In order to reach consumer equilibrium, the individual must arrange the consumption of Big Macs and milkshakes so that the:
a. marginal utility of the two goods is equal for the last dollar spent on each good. b. ratio of marginal utility to price is the same for both goods for the last dollar spent on each good. c. ratio of marginal utility of milkshakes to the marginal utility of Big Macs is 1 for the last dollar spent on each good. d. price paid for the two goods is the same.