Assume that the substitution effect dominates the income effect. When workers experience a positive price surprise, they
A. correctly perceive that their real wage rate has fallen, which leads them to work fewer hours.
B. correctly perceive that their real wage rate has risen, which leads them to work more hours.
C. incorrectly perceive that their real wage rate has fallen, which leads them to work fewer hours.
D. incorrectly perceive that their real wage rate has risen, which leads them to work more hours.
Answer: D
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Which of the following does not provide the corporation access to capital financing?
a. issuing new preferred stock b. paying shareholder dividends c. acquiring a bank loan d. issuing new corporate bonds e. issuing new common stock
A budget line is the locus of all points representing every input combination of inputs that the producer can afford to buy with a given amount of money and given input prices
a. True b. False Indicate whether the statement is true or false
A monopoly firm selling textbooks to students in a small town is currently maximizing profits by charging a price of $50 per book. It follows that the marginal cost of textbooks is:
A. less than $50. B. equal to $50. C. greater than $50. D. greater than the average total cost.
Refer to the graph shown. In the long run supply will become:
A. more elastic, rotating from S0 to S1, creating a larger shortage with a price ceiling of P2. B. less elastic, rotating from S0 to S1, creating a smaller shortage with a price ceiling of P2. C. more elastic, rotating from S0 to S1, creating a smaller shortage with a price ceiling of P2. D. less elastic, rotating from S0 to S1, creating a larger shortage with a price ceiling of P2.