Related to the Economics in Practice on page 131: Uber drivers can choose to drive as many or as few hours as they desire, and most drivers have another job and drive for Uber as a way to supplement their income. Assuming leisure is a normal good, if Uber increased the wages it paid its drivers then the income effect would result in drivers working ________ and buying ________ leisure.
A. more; more
B. more; less
C. less; less
D. less; more
Answer: D
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Trade between two parties is beneficial because:
a. it ensures that the standard of living in the poorer country matches its trading partner eventually. b. it enables each to consume a bundle of goods that it cannot produced domestically. c. it has an immediate effect on an economy by increasing its production set. d. it allows the economy of both trading partners to grow equally.
Many people feel that a negative income tax would ______.
a. make it harder to demonstrate need b. complicate the tax bureaucracy c. lead to better consumption choices d. reduce the incentive to work
Provisions in the law that automatically increase government spending or decrease taxes when real output declines are called:
A. the marginal propensity to consume. B. automatic stabilizers. C. autonomous stabilizers. D. the income-expenditure multiplier.
The mental and physical capacity of workers to produce goods and services is known as:
A. labor. B. entrepreneurship. C. value judgment. D. product sensitivity.