The labor supply curve starts to bend backward at the point where
a. the total utility of leisure exceeds the total disutility of labor.
b. the marginal utility of additional income becomes zero.
c. the income effect comes to dominate the substitution effect.
d. the substitution effect comes to dominate the income effect.
c
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Refer to the table above. Laborland's net factor payments from abroad equal ________
A) -$18 billion B) -$20 billion C) $25 billion D) $20 billion
Which of the following is NOT an example of adverse selection?
A) A family with a home ten feet from a large river buys flood insurance. B) A company uses the proceeds of a new stock sale to build an unnecessarily luxurious new headquarters. C) A terminal cancer patient buys life insurance. D) A company in serious financial trouble offers to pay you 30% on a loan.
The SSS Co has a patent on a particular medication. The medication sells for $1 per daily dose and marginal cost is estimated to be a constant at $0.20
Assuming linear demand and marginal cost curves, use this information to estimate the deadweight loss from monopoly pricing if the firm currently sells 1,000 doses per day. Can this loss be justified?
Which of the following would lead to an increase in the demand for British pounds?
a. A declining interest in British goods b. A decrease in the U.S. interest rate relative to the British interest rate c. Expectations that the exchange rate will fall d. A decrease of the U.S. price level relative to the British price level e. A decrease in the exchange rate.