Recall the Application about the response of bike messengers in Zurich to a change in wages to answer the following question(s).Recall the Application. A study of the messengers in Zurich showed that as the messengers' revenue share increased from 40% to 50%, the bike messengers took more shifts but pedaled slower. If the increase in the revenue is similar to a wage increase, then the increase in the shifts taken is reflective of:
A. the income effect.
B. the substitution effect.
C. neither the income nor the substitution effect.
D. both the income and the substitution effect.
Answer: B
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An assumption of classical growth theory is that when ________ the population growth rate ________
A) real GDP per person exceeds the subsistence level; increases B) people become more skilled; decreases C) the real wage rate falls; increases D) saving declines; decreases
Efficiency wages are:
A. wages deliberately set above the market rate in order to increase productivity. B. not a cause of unemployment. C. generally a disincentive for an employee to work hard to try to keep their job. D. All of these are true.
Sulfur Dioxide Discharged (Tons)Firm AFirm B10$8,000$9,000910,00012,000815,00018,000720,00027,000628,00037,000
Table 9.7 shows the production cost for two utilities at different levels of sulfur dioxide emissions. Assume that the government issued 8 marketable pollution permits to each firm. If Firm A contemplates selling one permit to Firm B, what is Firm A's willingness to accept?
A. $3,000 B. $5,000 C. $6,000 D. $7,000
An increase in a country's saving rate will tend to cause which of the following in the long run?
A. an increase in the unemployment rate B. an increase in the rate of inflation C. an increase in economic growth D. a reduction in per capita real GDP