The income effect of a wage increase will cause a worker to devote
A) more time to labor and less time to leisure. B) less time to labor and more time to leisure.
C) more time to labor and more time to leisure. D) less time to labor and less time to leisure.
B
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Assume that price is greater than average variable cost. If a perfectly competitive firm is producing at an output where price is $114 and the marginal cost is $102, then the firm is probably producing more than its profit-maximizing quantity
Indicate whether the statement is true or false
If the primary goal in implementing a tax is to maximize efficiency and minimize deadweight loss, the government should impose a(n):
A. income tax. B. lump sum tax. C. sin tax. D. proportional tax.
The gains from general training in human capital tend to go to the
A. individual and not to the employing firm. B. federal government in the form of higher taxes. C. parents since they paid for the education in the first place. D. employing firm and not to the individual.
Alex was willing to pay $50 for the new World Cup soccer ball. When he received it as a gift, he was willing to sell it, but for no less than $80. According to behavioral economists:
A. Alex's behavior is consistent with the endowment effect. B. Alex's behavior is irrational because of inconsistent anchoring. C. Alex should sell the ball if he's offered any amount over $50. D. Alex's behavior is irrational because his frame has changed.