Refer to Figure 17-4. Which of the following is true if the wage rate increases from W0 to W1?
A) The supply curve is unit elastic.
B) The income effect and the substitution effect are equal.
C) The income effect is larger than the substitution effect.
D) The substitution effect is larger than the income effect.
D
You might also like to view...
The supply curve of a uniquely talented actor or superstar athlete will be perfectly inelastic
Indicate whether the statement is true or false
If Tom wants to not be hit, what strategy could he follow
a. Threaten to not tell b. Always not tell c. Threaten to tell d. All of the above
The key distinction between risk and uncertainty is
a. Risk cannot be quantified, priced or traded b. Uncertainty refers to not knowing possible outcomes or their probabilities c. Uncertainty is modeled by listing the possible outcomes and assigning probabilities to the outcomes d. Risk has to do with not knowing the probability distribution of a random variable
Jake brings his Xbox home over winter break and leaves it there, thinking he will study more in the spring without it around. Jake is:
A. trying to compensate for the time-inconsistency of his desire to study more, but temptation to play video games instead. B. forcing his behavior to match economic theory. C. not acting rationally, since what he really wants is to play games all day. D. demonstrating that he has forgotten the fungibility of money.