The opportunity cost of working is the amount of leisure time that must be given up in order to work.
Answer the following statement true (T) or false (F)
True
Higher wage rates are required to compensate for the increasing opportunity cost of labor, which is the leisure time given up to work.
You might also like to view...
If the yield curve has a mild upward slope, the liquidity premium theory (assuming a mild preference for shorter-term bonds) indicates that the market is predicting
A) a rise in short-term interest rates in the near future and a decline further out in the future. B) constant short-term interest rates in the near future and further out in the future. C) a decline in short-term interest rates in the near future and a rise further out in the future. D) a decline in short-term interest rates in the near future and an even steeper decline further out in the future.
Because borrowers, once they have a loan, are more likely to invest in high-risk investment projects, banks face the
A) adverse selection problem. B) lemon problem. C) adverse credit risk problem. D) moral hazard problem.
Adverse selection is, in general, the asymmetric information problem that occurs
A) after a transaction is consummated. B) due to a size difference in the parties to a transaction. C) with securitization. D) before a transaction is consummated.
Which of the following is NOT a predictable result of a price ceiling set below the market clearing price?
A) an illegal market in the good B) excess quantity supplied C) excess quantity demanded D) lines to purchase the product