The cost disease of personal services stems primarily from the fact that
a. prices rise too slowly to provide public receipts.
b. inflation has been with us since the early 1970s.
c. personal service requires direct contact between producer and consumer.
d. sellers of personal services have strong unions.
c
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If producers who hire labor in a competitive labor market decide to purchase the new automated machine that completes the work of 30 employees, in the short run we would expect the:
A. labor-demand curve to shift to the right and wages would increase. B. labor-supply curve to shift to the left and wages would rise. C. labor-demand curve to shift to the left and wages would decrease. D. labor-supply curve to shift to the right and wages would rise.
What do economists call the study of situations in which people act in ways that do not appear to be economically rational?
a. normative economics b. rational economics c. behavioral economics d. the economics of fairness