If low-quality workers are unable to obtain a college degree, then a separating equilibrium can occur if
A) the cost of obtaining a degree is less than the wage premium paid to those who have obtained the degree.
B) the cost of obtaining a degree is greater than the wage premium paid to those who have obtained the degree.
C) the cost of obtaining a degree is zero.
D) the wage premium paid to those who have obtained the degree is positive.
A
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Refer to Table 7-4
a. Which country has an absolute advantage in the production of both light bulbs and flash drives? b. Which country has a comparative advantage in the production of light bulbs? c. Which country has a comparative advantage in the production of flash drives?
Assume individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose current taxes are cut AND that individuals expect future taxes to decrease. Given this information, we know with certainty that
A) current output and the current interest rate will both increase. B) current output will increase. C) the current interest rate will increase. D) the expected future interest rate will increase.