In the backward-bending portion of a labor supply curve:
a. a worker will increase the quantity of labor supplied in response to an increase in the wage.
b. the substitution effect of a wage change outweighs the income effect
c. the income effect of a wage change outweighs the substitution effect.
d. the substitution effect of a wage change equals the income effect.
c
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Which part or parts of the following statement describe each of the three functions of money?
"A pair of prescription glasses costs $250. I am spending $250 on one pair right now, and am saving $250 to buy a second pair in 6 months when the new styles are introduced."
A trade surplus could be balanced by all of the following except
a. borrowing from domestic citizens. b. selling domestic assets to foreigners. c. borrowing from foreigners. d. selling foreign assets already owned by U.S. citizens to foreigners.
Suppose that a consumer regards two types of soap as perfect substitutes for one another. The price consumption path generated by changing the price of one type of soap
A) is always upward sloping. B) is always horizontal. C) is always vertical. D) corresponds with the axis for the cheaper soap. E) corresponds with the axis for the more expensive soap.
A demand curve usually has a
a. negative slope because price and quantity demanded are inversely related b. negative slope because as price rises, demand falls c. positive slope because price and quantity demanded are positively related d. positive slope because price and quantity demanded are inversely related e. slope of zero because there is no change along a demand curve when everything else is held constant