Ryan experiences an increase in his wages. The hours of labor that he supplies to the market would increase if
a. the income effect is larger than the substitution effect.
b. the substitution effect is larger than the income effect.
c. neither the income effect nor the substitution effect apply to Tom's labor-leisure tradeoff.
d. Ryan views both labor and leisure as inferior goods.
b
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To convert the nominal interest rate to the real interest rate, we
A) divide the nominal interest rate by the inflation rate. B) multiply the nominal interest rate by the inflation rate. C) subtract the inflation rate from the nominal interest rate. D) add the inflation rate to the nominal interest rate. E) subtract the nominal interest rate from the inflation rate and then multiply by 100.
The term market refers to the:
A. physical location where buyers and sellers meet to exchange goods for money. B. buyers and sellers who trade a particular good or service, not to a physical location. C. location where buyers go to fulfill their wants and needs. D. physical or virtual place of exchange.
The U.S. government bonds are likely to be less risky because:
a. the government always runs a balanced budget. b. the government bonds are backed by gold. c. the government can raise taxes to redeem the bonds at maturity. d. the government has limited liability to repay. e. the government always has an excess reserve of foreign exchange.
Since individual consumers do not know how much of the price they pay for a commodity is due to protection, consumers rarely lobby their political representatives to eliminate protection and reduce prices
a. True b. False Indicate whether the statement is true or false