A decision to supply labor or not to supply it is also a decision to
a. earn the highest possible wage.
b. demand or forgo a certain amount of leisure.
c. be as productive as possible.
d. join the union.
b
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If you accept the rational expectations hypothesis as accurate, what would you tell monetary policy makers who ask you how to more effectively manage the economy?
A) Individuals do understand how monetary policy works, so consistency and predictability are the keys to effective policy making. B) Only unanticipated policies will be effective once individuals understand how monetary policy works. C) Consumers do not understand the workings of monetary policy, so discretionary and nondiscretionary policies are equally effective. D) Individuals base their economic expectations solely on current information, so repeating policy decisions that have worked in the past is the most effective path to take.
When the government levies a $100 million tax on people's income and puts the $100 million back into the economy in the form of a spending program, such as new interstate highway construction, the:
a. tax, then, generates a $100 million decline in real GDP. b. level of real GDP expands by $100 million. c. effect on real GDP is uncertain. d. tax multiplier overpowers the income multiplier, triggering a rollback in real GDP.
Other things the same, another unit of capital will increase output by more in a poor country than in a rich country
a. True b. False Indicate whether the statement is true or false
Will a monopolist produce at a quantity that is higher than the long-run competitive equilibrium output level?
A. No, profit maximization for a monopoly always occur at a lower output level than in a competitive market. B. Yes, the monopoly always produces at an output level larger than in a competitive market. C. Yes, but only if it is a monopoly because it holds a patent. D. There is no theory in microeconomics that states that a monopolist produces larger or smaller output than in a perfectly competitive firm in the long-run.