Suppose that an individual has chosen not to work. Then a change in the wage rate:
A. creates a substitution effect, but no income effect.
B. creates an income effect, but no substitution effect.
C. creates both and income and substitution effect.
D. creates neither an income effect nor a substitution effect.
A. creates a substitution effect, but no income effect.
You might also like to view...
Refer to the above figure. A budget deficit occurs when real national income is
A) Y3. B) Y1. C) Y2. D) None of the above: cannot be determined given the information.
Rayburn Reed is a highly talented photographer. He has chosen to specialize in photography because of all of the following except
A) for him, this is the most lucrative way to purchase the products that he wants to consume. B) his photographs are highly esteemed by art lovers who are willing to pay very high prices. C) he obviously has a comparative advantage in photography. D) his opportunity cost of pursuing another career is very low.
The gains from consumer surplus and producer surplus occur when
A) both consumers and producers engage in voluntary exchange. B) consumers are willing to buy a good but producers are not willing to provide it. C) producers are willing to provide a good but consumers are not willing to pay for it. D) the government supplies the good instead of firms.
Which statement is true?
A. More than any other region in the nation, the South prospered the most in the years following the Civil War. B. The transcontinental railroads that were completed in the 1860s, 1870s, and 1880s, all bypassed the South. C. Before the Civil War most of the nation's large farms were located in the North. D. None of the choices are true.