The labor-supply curve will be downward sloping if the:
A. income effect outweighs the price effect.
B. substitution effect outweighs the income effect.
C. price effect outweighs the income effect.
D. The labor-supply curve is never downward sloping.
Answer: A
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A Rolling Stones song goes: "You can't always get what you want." This echoes an important theme from microeconomics. Which of the following statements is the best example of this theme?
A) Consumers must make the best purchasing decisions they can, given their limited incomes. B) Workers do not have as much leisure as they would like, given their wages and working conditions. C) Workers in planned economies, such as North Korea, do not have much choice over jobs. D) Firms in market economies have limited financial resources.
Suppose the recipient of a kidney transplant has stated that she would prefer 5 years of perfect health to the 10 years she expects to live with her transplant. For this person, each of her remaining 10 years of life has a QALY value of
a. ½. b. 2 c. 5 d. 10 e. 50.
Why is deflation such a problem for consumption and investment?
A. It increases the rate of both. B. It causes firms and households to spend more. C. It slows both. D. It slows investment while simultaneously increases consumption.
If profit regulation is used to control a natural monopolist, the monopolist is likely to
A. Reduce maintenance of plants and equipment. B. Increase the quality of its product in an effort to increase sales. C. Attempt to reduce the costs of production. D. Inflate or pad the costs of production.