The backward-bending section of the labor supply curve suggests that
A. there is no income effect.
B. the income effect outweighs the substitution effect at those higher wage levels.
C. the substitution effect outweighs the income effect at those higher wage levels.
D. None of the choices are correct.
B. the income effect outweighs the substitution effect at those higher wage levels.
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Relative to a single price monopolist, a price discriminating monopolist generates:
A. more total surplus. B. the same amount of total surplus, but higher profits. C. less total surplus. D. the same amount of total surplus, but lower profits.
The decision about what goods and services will be produced in a centrally planned economy is made by
A) producers deciding what society wants most. B) lawmakers in the government deciding on what will be produced. C) consumers dictating to firms what they need most. D) workers deciding to produce only what the boss says must be produced. E) consumers and firms choosing which goods and services to buy or produce.
An instance in US history when SRAS increased was
a. The Great Depression (1930s) b. WWII (early 40s) c. OPEC (70s) d. Tech Boom (90s)
Starting from potential output, if firms become less optimistic about the future and decide to decrease their investment in new capital, then this will generate a(n) ________ gap and inflation will ________.
A. expansionary; decrease B. recessionary; decrease C. recessionary; increase D. expansionary; increase