Helped by desktop publishing, the number of vintage baseball card forgeries has flooded the market for vintage baseball cards. Dealers left the market for fear of purchasing a phony. What was the effect on the market for vintage baseball cards assuming phonies could not be detected?
A. Demand shifted to the left, supply did not change, price declined, and quantity traded declined.
B. Supply shifted to the right, demand did not change, price declined, and quantity traded rose.
C. Supply shifted to the right, demand shifted to the left, and price declined.
D. Supply shifted to the right, demand shifted to the left, and price rose.
Answer: C
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An economic model suggests that an additional year of education increases a student's future wages by 15 percent. Using this model, answer the following questions:
a) Gary completes 8 years of education, and John completes 9 years of education. If Gary earns $20 per hour, how much is John expected to earn? b) John completes 9 years of education, and Kevin completes 12 years of education. Given John's earnings [as calculated in a)], how much is Kevin expected to earn? c) Is there any limitation to such a model? Explain your answer.
If a competitive firm faces a competitive labor market, it will hire labor until
A) w = p. B) w = MPL. C) w = MPL ? p. D) MPL = 0.