Figure 20-3
Figure 20-3 shows a worker’s backward-bending supply curve of labor. Which of the following statements is correct?
A. The substitution effect of a change in the wage dominates the income effect at all points on the curve.
B. The income effect of a change in the wage dominates the substitution effect at all points on the curve.
C. Above W*, the substitution effect of a change in the wage dominates the income effect; below W*, the income effect dominates the substitution effect.
D. Above W*, the income effect of a change in the wage dominates the substitution effect; below W*, the substitution effect dominates the income effect.
Answer: D
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Convertible shareholders can
a. convert their shares into bonds at any time b. convert their shares into preferred stock at any time c. convert their shares in one corporation to shares in another corporation in a one-to-one ratio at any time d. convert their shares into common stock at any time e. vote at shareholder meetings on important corporate matters
Which of the following helped transform the budget deficits of the early 1990s into surpluses later in the decade?
a. Rapid growth in the number of persons moving into the retirement phase of life during the 1990s b. A reduction in defense expenditures following the end of the Cold War c. A 1997 increase in the tax rate imposed on income derived from capital gains d. A reduction in Social Security and health-care benefits during the 1990s
On a graph of a production possibilities curve, if a point is attainable, then it:
A. is efficient only if it does not exhaust all currently available resources. B. must completely exhaust all currently available resources. C. must be efficient. D. might or might not be efficient.
During Thanksgiving you participated in a pumpkin-pie eating contest. You really enjoyed the first two pies, the third one was okay, but as soon as you ate the fourth one you became ill and lost the contest. Your total utility ________ with the first three pies you ate.
A. first increased than decreased B. decreased C. stayed the same D. increased