The classical model fails to recognize that
a. labor markets always clear
b. managers develop paternalistic feelings toward their workers
c. labor markets do not always clear
d. what was true yesterday might not be true today
e. search costs are low during recessions
C
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A company that makes baseball caps is underutilizing its resources. What does this mean?
a) The company is running more efficiently than its competitors b) The company is paying its employees less than it should be c) The company is making caps when it could be making t-shirts instead d) The company is producing fewer caps than it could be
Adhering to the principle of revenue neutrality _____
a. allows for the separation of efficiency and the overall level of taxation b. allows for the separation of equity and the overall level of progressivity c. allows for the separation of equity and government spending d. allows for the separation of efficiency and intergovernmental transfers