Serafina was earning $75 per hour and working 50 hours per week. Serafina's wage rose to $90 per hour, and as a result, she now works 60 hours per week
What can you conclude from this information about the income effect and the substitution effect of a wage change for Serafina?
We can conclude that Serafina's substitution effect (higher wages lead to higher opportunity cost of leisure, leads to lower leisure, leads to more labor) is greater than her income effect (higher wages lead to higher income, leads to more leisure, leads to less labor). As a result, Serafina works more hours as her wage increases.
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The minimum short-run average total cost for Tony's Barbecue equals $8.50 at an output level of 100 meals per day. The market price of each meal is $8 . In short-run equilibrium, Tony
a. will suffer an economic loss of $50 per day, serving 100 meals per day b. cannot avoid an economic loss and should produce where the difference between average total cost and the price is minimized c. cannot avoid an economic loss and should serve no meals per day d. will suffer an economic loss greater than $50 per day, serving more than 100 meals per day e. will suffer an economic loss greater than $50 per day, serving less than 100 meals per day
Inaccurate prediction generally invalidates the use of theory in economics
a. True b. False Indicate whether the statement is true or false
Why are producers are willing to offer greater quantities for sale at higher price because of?
What will be an ideal response?
Models that that require knowledge of the relevant history to reach a conclusion are referred to as:
A. deductive models. B. mathematical models. C. path-dependent models. D. codependent models.