What is the income effect for leisure demand?
What will be an ideal response?
The change in leisure time resulting from a change in real income caused by a change in the wage rate. A higher wage increases the demand for all normal goods.
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Refer to the figure above. What is the equilibrium wage rate if the labor demand curve is LD2 and labor supply curve is LS2?
A) $20 B) $30 C) $15 D) $25
When a government mandate sets the rental price of an apartment below the market clearing level, which of the following result?
A) More apartments are rented. B) Landlords attempt to make up for the lower rental income by charging more for security deposits and cleaning fees. C) Landlords discriminate less. D) Landlords address their tenant's requests in a more prompt manner.
The assumption that individuals act rationally implies that
a. people think only of themselves and disregard the well-being of others b. people undertake all those activities that yield benefits to themselves c. people only consider the costs of an activity to decide whether it is worthwhile d. the greater the cost of a charitable deed to a benefactor, the more likely he or she is to perform that deed e. people implicitly calculate the costs and benefits of an activity to decide if it is worthwhile
If the supply curve of labor shifts to the left, we know for certain that
a. technology has improved b. a higher wage rate must be offered to employ the same number of workers that were employed before the shift in the curve occurred c. any quantity of workers can be hired at the same wage d. the MRP has decreased e. the MRP has increased