The substitution effect of wages explains shifts in the labor supply curve.
Answer the following statement true (T) or false (F)
False
The substitution effect of wages occurs when an increased wage rate encourages people to work more hours (to substitute labor for leisure) and vice versa. The substitution effect causes the supply curve to be upward-sloping, not to shift.
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Utility is:
A. a quantitative measure of consumers’ preferences. B. an objective measure of a person’s happiness. C. as difficult to measure as an individual's income level. D. a meaningful number measuring a consumer’s precise level of satisfaction.
Suppose Toyota produces 100,000 cars per year at its California plant at an average cost of $6,000 and it doubles output and total costs by building an identical plant in Kentucky. Toyota has exhibited
a. diminishing marginal returns b. economies of scale c. constant average costs d. an upward-sloping planning curve e. production inefficiency
Dumping refers to selling a product abroad at higher prices than the product is sold domestically
Indicate whether the statement is true or false
If the MPC = .80, and investment rises from $100 to $150, real GDP will increase by:
A. $50. B. $125. C. $200. D. $250.