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If the productivity of farmers has risen substantially over time because of technological progress, and workers can move freely between being farmers and barbers, the neoclassical theory of distribution predicts that the real wage(s) of:
both barbers and farmers should have risen over time.
farmers should have risen while the real wage of barbers should have remained constant.
barbers should have risen while the real wage of farmers should have remained constant.
both barbers and farmers should have remained constant over time.
What are transnational corporations (TNCs, or multinational corporations, MNCs) and how are they different from other business firms? Why have the MNCs become more important in international political economy during the past three decades? How have r..
One of the major reasons that foreign expatriates have difficulty doing business in the United States is that they do not understand American slang. For U.S. companies going abored for the first time, which forms of nonverbal communication barrier, w..
Differentiate between the treatment of S corporation distributions from corporations having no earnings and profits, and corporations having accumulated earnings and profits. Suggest the most significant reason for the difference in the treatment ..
Suppose that the insurance company would set the premium by imposing a zero profit restriction. That is, the premium would be set to be (1+L)EB, where L is the loading factor and EB is the expected benefit. Let us assume that L = 20%. Calculate the p..
Based on the discussion in this chapter, update the controversy over the value of the Chinese yuan in foreign currency markets. Is China still using central bank foreign exchange policy to maintain the value of the yuan? What is the current policy of..
Suppose a second firm enters the market, producing the same product. The total quantity supplied in the market is now the sum of the two producers, a Cournot Duopoly. Determine the equations for each firm’s Total Revenue, TR and for each firm’s Margi..
Stan Money maker needs 16 gallons of gas to top off his tank. I he drives an extra 8 mile round trip Stan can save an extra $0.05 a gallon. Suppose gas costs $3.10 per gallon and Stan gets 24mpg. Each mile driven gives off CO2 that has an environment..
Suppose you get a student loan for $8,000, and your payments are deferred until after you graduate, 2 years from now. Then, you will make 15 yearly payments (starting 2 years from now). What are your payments? The interest rate is 8%/year.
Consider a small barter economy with only two individuals, John and Mark. John’s preferences for the two available goods (x and z) are given by. Draw the Edgeworth box for this economy including example indifference curves for each individual and the..
Output is produced according to Q = 4LK, where L is the quantity of labor input and K is the quantity of capital input. If the price of K is $10 and the price of L is $5, then the cost minimizing combination of K and L capable of producing 32 units o..
It is generally accepted among economists that minimum wage warps the equilibrium point between the supply and demand of labor by instituting price floor and increases unemployment for unskilled laborers (while increasing the wage for the individuals..
If the quality differences of similar products are mostly imperceptible to the average consumer's eyes, which of the following will most likely play a major role in influencing the decisions of purchasers?
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