Consider the indifference curve-budget line model of labor supply, and assume consumption and leisure are both normal goods. A higher wage rate would result in
a. more consumption and less leisure.
b. a reduction in the worker's marginal value of leisure.
c. reduced consumption if the income effect is larger than the substitution effect.
d. increased labor only if the substitution effect outweighs the income effect.
d. increased labor only if the substitution effect outweighs the income effect.
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Jack has a ticket to see Daughtry for which he paid $30 yesterday. He takes an unpaid day off from work to get ready for the concert. When he arrives at the concert, five different people offer him $70 for his ticket. Jack decides to keep his ticket. At the time he makes this decision, his opportunity cost of seeing Daughtry is:
A. $70 plus his forgone earnings. B. $30 plus his forgone earnings. C. $70. D. $40.
What method is often used when both parties want to eliminate information asymmetry
A. Screening. B. Signaling. C. Statistical discrimination. D. Moral hazard.
A profit-maximizing monopolist sets
a. her price where MC = MR. b. her output where MC = MR. c. Both a and b are correct. d. Neither a nor b is correct.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.