Firms have an incentive to substitute labor for capital as the

A good way to view macroeconomic equilibrium is:

a. Water at rest in a tub. b. Two opposing forces, like water flowing into and out of a tub but the level remaining constant. c. A state of complete rest, where an economy comes to a complete halt for a brief period. d. A state of rapid change, but one where the adjustment from one level to another is so quick that the shifts are seamless to most observers. e. Where the supply and demand for economic activity equals the supply and demand for political activity.

The principle of “comparable worth” asserts that people with comparable, if not identical, skills and responsibilities should receive the same pay. If this principle were to become law, it would tend to

A. reduce the problem of the “cost disease of services.” B. exacerbate the problem of the “cost disease” of the service sector. C. be irrelevant to the “cost disease” problem. D. eliminate the problem of externalities.