Assume that there are two types of perfectly competitive firms whose cost of production differ. An increase in input prices will lead to an exodus of high cost firms before low cost ones

Which of the following explains why private employers (more frequently than public employers) have tended to shift away from defined benefit programs?

A. Their employees have begun to reduce the amount they shift from one employer to the next. B. Their employees have more frequently fallen victim to Ponzi schemes. C. Their employees have begun to increase the amount they shift from one employer to the next. D. People have begun to create well-funded private savings plans.

Academic institutions frequently talk about academic excellence and how they have superior programs in everything. "If it is not top quality it will not be offered here" seems to be the theme of many college catalogs. Explain, on the basis of material in this chapter, why this public relations noise is not believable.

What will be an ideal response?