If the coal mining firms were able to get together and cut miners' wage rates in half, many coal miners would quit the mines. On the other hand, if major-league owners were able to get together and cut baseball salaries in half, very few of the ballplayers would quit baseball. Why?
Answer to relevant QuestionsWhen Sears decides to move from its downtown location to a shopping mall on the outskirts of town, some people suffer loss of rent, while others end up getting more rent. Why? How much wage-related rent is generated in each of the following cases? What is a Lorenz curve? How does it illustrate income inequality? What is a consumer price index? How is it constructed? Why does the index become increasingly unreliable over time? Contrast the expenditure and income approaches to calculating GDP.
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