The price for labor is the wage rate. What happens to the quantity of labor supplied if wages increase?
a. It increases.
b. It decreases.
c. It does not change.
d. Uncertain-economic theory has no answer to this question.
a
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Marginal utility theory predicts that if a consumer's income decreases, the consumer
A) buys fewer normal goods. B) buys fewer inferior goods. C) buys more of all goods. D) might either increase or decrease purchases of normal goods.
Suppose we plot the total revenue curve with quantity on the horizontal axis and revenue on the vertical axis (as in Figure 8.1 in the book). Under price-taking behavior, the total revenue curve should be:
A) an inverted U-shaped curve (first increasing and then decreasing). B) a U-shaped curve (first decreasing and then increasing). C) a horizontal line with vertical axis intercept equal to the market price. D) a straight line from the origin with slope equal to the market price.
The banking system creates money in the sense that it: a. prints money
b. creates excess reserves from loans. c. creates loans from excess reserves. d. creates required reserves from loans. e. creates loans from required reserves.
If the aggregate supply curve is positively sloped, an increase in the money supply will result in an increase in both equilibrium national income and the equilibrium price level
a. True b. False Indicate whether the statement is true or false