Author Question: If individuals are paid the wage at which the supply of labor is equal to the demand for labor, ... (Read 21 times)

B · **on:** Jul 1, 2018

If individuals are paid the wage at which the supply of labor is equal to the demand for labor,

A) no unemployment exists, and workers have no incentive to shirk.
B) no unemployment exists, and workers have an incentive to shirk.
C) some unemployment still exists, but workers have no incentive to shirk.
D) some unemployment still exists, but managers can tell whether or not workers are shirking.

Question 2

Why does the NPV of a college education tend to be positive but relatively small?

A) College students tend to be young and poor, so their opportunity cost of capital is high.
B) College graduates typically have limited on-the-job skills, so their initial returns from the education investment tend to be small.
C) There are few barriers to entry for a college education.
D) Most of these studies are based on nominal interest rates, so the NPV is smaller than we would achieve under real interest rates.