When wages increase, the income effect of labor supply ________ the quantity of labor supplied because ________.

A. reduces; the price of leisure has increased
B. reduces; workers acquire more of all normal goods (including leisure) when income increases
C. increases; the value of working has increased
D. increases; the price of leisure has increased


Answer: B

Economics

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Objects in and of themselves have no costs. Lunches are an object, so they presumably have no cost. Yet we often hear economists say, "There is no such thing as a free lunch." Are economists being inconsistent?

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In a monopolistically competitive industry

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Economics

Wastes impose costs upon the community if they are

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Economics