When the price of labor increases, the substitution effect will ________ the quantity of labor demanded and the output effect will ________ it
A) increase; increase
B) increase; decrease
C) decrease; increase
D) decrease; decrease
Answer: D
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In the above table, if the marginal revenue product is $22, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?
A) 5; $18 B) 3; $14 C) 4; $22 D) 4; $16
Which statement is true?
A. American industry is very competitive. B. There is no competition in American industry. C. In order to have competition you need to have many firms in an industry. D. The electrical and natural gas industries are good examples of competition at work.
In a grim-trigger strategy, a firm responds to underpricing by choosing a price so low that each firm makes zero economic profit.
Answer the following statement true (T) or false (F)
Basket of goods A is on an indifference curve that lies further from the origin than basket B. From this we know that
A) the prices of the goods in A are more than the prices of the goods in B. B) the satisfaction from consuming A is more than the satisfaction from consuming B. C) the marginal utility from consuming A is more than the marginal utility from consuming B. D) all other consumers would also rank B above A.