In general, an increase in wages will lead to some reaction in line with
a. the income effect but not the substitution effect.
b. the substitution effect but not the income effect.
c. both the income and substitution effect.
d. neither the income effect nor the substitution effect.
c
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According to the principle of diminishing returns to labor, if the amount of capital and other inputs are held constant, employing additional workers:
A. increases output at an increasing rate. B. increases output at a decreasing rate. C. increases output at a constant rate. D. decreases output at an increasing rate
What are sticky prices, and how can contracts make them "sticky"?
What will be an ideal response?
A lower price level causes us to
A) move up along the aggregate demand curve. B) move down along the aggregate demand curve. C) shift the aggregate demand curve to the right. D) shift the aggregate demand curve to the left.
More cattle are found to have mad cow disease. As a result, consumer confidence in the safety of beef is shaken. What would an economist predict will happen in the beef market?
A) As consumer preferences move away from beef, there is an upward movement along the beef demand curve. B) The demand curve will shift to the left. C) The demand curve does not shift but consumers move to a point lower down the curve. D) absolutely no change in either the quantity demand or the demand for beef