At a low wage rate,
a. there is no substitution effect
b. there is no income effect
c. the substitution effect usually outweighs the income effect
d. the income effect usually outweighs the substitution effect
e. the disutility of market work is usually high
C
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Which of the following statements is correct?
A) The Fed is fully insulated from external pressures due to the long terms that members of the Board of Governors serve. B) The Fed is fully insulated from external pressures because it does not need to go through the normal congressional appropriations process. C) The Fed is fully insulated from external pressures because it has a constitutional mandate. D) The Fed is only partially insulated from external pressures.
Which of the following would be evidence against rational expectations?
a. unpredictable changes in policy have real effects. b. new information leads to changes in output. c. the public never make mistakes with respect to price level predictions. d. changes in stock prices change much more often than new information becomes available.
All of the following are major factors limiting economic growth in developing countries EXCEPT
A) dead capital. B) deregulation. C) inefficient government regulation. D) corruption.
Exhibit 7-15 Short-run cost curves for E-Z Care lawn mowing company
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In Exhibit 7-15, suppose the market price of mowing lawns falls to $10 per lawn. In this situation, E-Z-Care will:
A. permanently exit the industry. B. shut down its operations, at least in the short run. C. continue to mow lawns in the short run despite its economic losses. D. earn a normal profit.