If an individual's supply of labor curve is "backward bending," (that is, labor supply falls at high wage rates) then:
a. the substitution effect always dominates the income effect.
b. the income effect always dominates the substitution effect.
c. the substitution effect dominates at low real wage levels and the income effect dominates at high real wage levels.
d. the income effect dominates at low real wage levels and the substitution effect dominates at high real wage levels.
c
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What is the primary benefit of a monetary system of exchange compared to a barter system?
What will be an ideal response?
On a graph of a production possibilities curve, an inefficient point is:
A. necessarily an attainable point. B. possibly an unattainable point. C. necessarily an unattainable point. D. not necessarily an attainable point.
Suppose a college increases the wages paid to student employees. Which of the following options is the best description of the most likely effect of the increase in wage earnings on the demand curve for school sweatshirts in the bookstore?
A) The demand curve shifts to the right. B) The demand curve shifts to the left. C) a leftward movement along the demand curve D) a rightward movement along the demand curve
If the graph shown represents Hanna's budget constraint, and the price of hairbands were to decrease, the slope of Hanna's budget constraint would become:
A. flatter, reflecting the fact that earrings are now relatively more expensive. B. flatter, reflecting the fact that hairbands are now relatively more expensive. C. steeper, reflecting the fact that hairbands are now relatively less expensive. D. steeper, reflecting the fact that earrings are now relatively less expensive.