Refer to Figure 17-4. Which of the following is true if the wage rate increases from W1 to W2?
A) The substitution effect becomes larger than the income effect.
B) The income effect becomes larger than the substitution effect.
C) The supply curve is unit elastic.
D) The income effect and the substitution effect are equal.
B
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The goal of programs such as government-subsidized housing, food stamps, and Medicaid are to:
A. spur economic growth. B. redistribute wealth from the rich to the poor. C. reduce the time people spend in transient poverty. D. None of these is true.
The presence of involuntary part-time workers
a. causes the official unemployment rate to underestimate actual unemployment b. causes the official unemployment rate to overestimate actual unemployment c. has no effect on the accuracy of the official unemployment rate d. is accounted for in the official unemployment rate e. is insignificant in the U.S. economy and thus is no cause for concern
Assume that the price-consumption curve is horizontal. What additional information does that tell you about the demand for good X and the amount people spend on it?
What will be an ideal response?
Marginal revenue product
A. increases when marginal product decreases. B. eventually increases as labor input increases. C. measures the benefit to the firm from hiring an additional unit of labor. D. is calculated as the marginal product of labor divided by the price of output.