If Anh's elasticity of labor supply is 1.5 and she increases her supply of labor by 5 percent, then the wage rate must have
A. Increased by 3.3 percent.
B. Increased by 3.0 percent.
C. Decreased by 7.5 percent.
D. Increased by 7.5 percent.
Answer: A
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Refer to the scenario above. If the income tax rate for the fourth household is higher than the income tax rate for the second household, it can be inferred that the government follows a ________ income tax system
A) progressive B) regressive C) proportional D) value-added
Other things being equal, a decrease in the default risk of corporate bonds shifts the demand curve for corporate bonds to the ________ and the demand curve for Treasury bonds to the ________
A) right; right B) right; left C) left; right D) left; left
As inflation drives up prices, people attempt to find substitutes and adjust what they buy. The resulting substitution bias problem causes the CPI to:
a. overstate the impact of higher prices on consumers. b. consistently underestimate the true inflation rate. c. omit the benefits of product quality improvements. d. have larger fluctuations than other price indexes.
The idea of time inconsistency explains procrastination by:
A. recognizing that we have several modes of decision making, and the less time we have to react, the worse the decision is. B. recognizing that we never take long-term benefits into account. C. recognizing that our ability to remember long-term benefits when making decisions diminishes the closer the action becomes. D. recognizing that we have two modes of decision making, a "future-oriented" and a "present-oriented" self, who have conflicting objectives.