If leisure is an inferior good, then an increase in wages will cause workers to work more.
Answer the following statement true (T) or false (F)
True
Rationale: In this case, both the substitution and wealth effect cause the worker to reduce leisure consumption as wages increase.
You might also like to view...
Local construction projects and military base funding are usually passed through Congress by using ______.
a. vertical equity b. user fees c. rational ignorance d. logrolling
A capital-intensive production process is one that
A. Has a high ratio of capital to labor. B. Has a high ratio of labor to capital. C. Is used only in the United States. D. All of the choices are correct.
Two firms would sometimes be better off if they got together and agreed to charge a high price, rather than to compete and risk having to charge a lower, competitive price. What is the greatest deterrent to this strategy?
A) The firms may find that the price they charge is greater than the price that would maximize their profits. B) An agreement by firms to charge high prices is illegal. The government can fine the firms and send their managers to jail. C) Consumers may resent having to pay high prices and not buy from either of the firms. D) One of the firms may decide to lower its price and take business away from the firm that charged the high price.
Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, sector X will likely see ________ and sector Y will likely see ________.
A. capital outflow; capital inflow B. no change in capital flows; capital outflow C. capital inflow; capital outflow D. capital inflow; no change in capital flows