Assuming that leisure is a normal good, if an individual's labor supply curve is upward sloping, then the
A. income effect and the substitution effects are equal.
B. income effect is zero.
C. substitution effect outweighs the income effect at higher wages.
D. income effect outweighs the substitution effect at higher wages.
Answer: C
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The marginal rate of substitution is determined by the slope of an indifference curve
Indicate whether the statement is true or false
If a competitive firm is in short-run equilibrium, then
A) profits equal zero. B) economic profits will be positive. C) economic profits will be negative. D) All of the above are possible in the short run.
One of the defining characteristics of an oligopoly is that:
A. the strategic interactions between a firm and its rivals have a major impact on its profits. B. no single firm has an impact on the market as a whole. C. there are only a few buyers in the market. D. there are no barriers to entry to the market.
The price tag on a tennis ball in 1975 read $0.10, and the price tag on a tennis ball in 2005 read $1.00 . The CPI in 1975 was 52.3, and the CPI in 2005 was 191.3 . In 1975 dollars, a 1975 tennis ball cost $0.10 and a 2005 tennis ball cost
a. $0.27, so tennis balls were cheaper in 1975. b. $0.27, so tennis balls were cheaper in 2005. c. $3.66, so tennis balls were cheaper in 1975. d. $3.66, so tennis balls were cheaper in 2005.