A Portion of a Worker's Earnings Is Rent If

question 343

Multiple Choice

A portion of a worker's earnings is rent if

• A) the worker was the last person hired at the going wage rate.
• B) the supply curve of labor is horizontal.
• C) the worker would accept a small wage cut without quitting or working for someone else.
• D) the worker has industry-specific skills.

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Definitions:

Purchasing Power Parity

A theory that states that in the absence of transportation and other transaction costs, identical goods should have the same price in different countries when prices are converted into a common currency.

Exchange Rates

The valuation of one currency in the process of being exchanged for another.

Balance Of Payments

A record of all economic transactions during a given period between residents of one country and residents of the rest of the world.

Euros

The eurozone's official currency, adopted by 19 out of the 27 countries in the European Union.