Answer the following statement(s) true (T) or false (F)
1. A business owner who begins reducing his office hours once the firm is highly
profitable illustrates the income effect.
2. When wages are above the equilibrium level, demand will exceed the quantity of
labor supplied.
3. When the established wage is above the equilibrium level, unemployed workers are
willing to accept a lower wage in order to get jobs.
4. When productivity rises, the labor demand curve shifts to the right.
5. Efficiency-increasing technology will move the labor demand curve to the left.
1. TRUE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
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Which of the following is a legal remedy for a breach of the contract between parties?
a. Liquidated damages b. Imprisonment c. Unitization d. Specificity
According to the circular-flow diagram GDP
a. can be computed as either the revenue firms receive from the sales of goods and services or the payments they make to factors of production. b. can be computed as the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production. c. can be computed as payments firms make to factors of production but not as revenues they receive from the sales of goods and services. d. cannot be computed as either the revenue firms receive or the payments they make to factors of production.
A drawback of separating ownership from control by creating a firm is:
A. synergies of team production. B. the principal-agent problem. C. the losses of specialization. D. increased transaction costs.
Which of the following is true of the relationship between income inequality and public policy in the U.S. since the 1980s?
A. Public policy has been more favorable to those at the high end of the income distribution resulting in an increase in income inequalities. B. Public policy has been less favorable to those at the high end of the income distribution resulting in a decrease in income inequalities. C. Public policy has been more favorable to those at the low end of the income distribution resulting in an increase in income inequalities. D. Public policy has been less favorable to those at the low end of the income distribution resulting in a decrease in income inequalities.