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
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The figure above shows the loanable funds market. The equilibrium real interest rate is ________ percent, and the equilibrium quantity of loanable funds is ________
A) 4; $1.4 trillion B) 6; $1.6 trillion C) 4; $1.8 trillion D) 8; $1.8 trillion E) 8; $1.4 trillion
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?
A) It is impossible to tell. B) Yes, if the statement implies lunch actually has a cost. C) No, if the statement implies the decision to offer lunches free of charge entails the sacrifice of scarce resources, which could have served other useful purposes. D) Both B and C are true.
In a monopolistically competitive industry
A) firms can make an economic profit in the long run because of barriers to entry. B) the firms can never make an economic profit. C) if firms are making an economic profit, new firms enter the industry. D) firms can make an economic profit in the long run because of product differentiation.
Wastes impose costs upon the community if they are
a. solid. b. liquid. c. gaseous. d. any of the above.