The typical labor supply curve is upward sloping but it is possible for the curve to be backward bending —negatively sloped—at very high wage levels. Which of the following would cause a backward-bending supply curve?
A) This would occur if leisure is an inferior good.
B) This would occur when the substitution effect from an increase in the wage becomes larger than the income effect.
C) This would occur when a large number of workers choose leisure rather than employment at low wages; only a very large increase in the wage will lead these workers to prefer employment to leisure.
D) This would occur when the income effect from an increase in the wage becomes larger than the substitution effect.
D
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Monopolistic competition is characterized by firms
A. producing differentiated products. B. producing where price equals marginal cost. C. making economic profits in the long run. D. producing at optimal productive efficiency.
One thing we can do to reduce trade imbalance in the United States would be to
A. push down the value of the dollar relative to other currencies. B. raise the prices of U.S. exports. C. raise consumption in the United States. D. lower savings in the United States.
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Mr. Lingle?s budget constraint is AC. Point A is
A. not in Mr. Lingle's opportunity set but is on his budget constraint. B. an available option and Mr. Lingle exactly spends all of his income. C. an available option and Mr. Lingle does not spend all of his income. D. not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.
What are the effects on U.S. imports and exports when the U.S. experiences economic growth stronger than its major trading partners?
A. U.S. imports will increase more than U.S. exports B. U.S. exports will increase more than U.S. imports C. U.S. imports will decrease, but U.S. exports will increase D. There will be no effect on U.S. imports and exports