Author Question: From the Hotelling rule, we would expect that a perfectly competitive industry selling an ... (Read 51 times)

laurencescou · **on:** Jul 1, 2018

From the Hotelling rule, we would expect that a perfectly competitive industry selling an exhaustible resource would

A) sell more of it than a monopolist would in each period.
B) sell it all at once.
C) sell less of it than a monopolist would in each period.
D) not sell it.
E) not sell it unless interest rates were low.

Question 2

Suppose new electronic devices make it easier to monitor the effort levels of workers. If some shirking is still possible in the efficiency wage model, what happens to the efficiency wage?

A) Declines, but remains above the market-clearing wage
B) Declines, and falls below the market-clearing wage
C) Increases
D) Does not change