The output effect of a change in the wage rate on a firm's demand for labor input will be greater:
a. the larger the share of labor costs in total costs and the greater the price elasticity of demand for output.
b. the larger the share of labor costs in total costs and the smaller the price elasticity of demand for output.
c. the larger the share of labor costs in total costs and the higher the quantity demanded.
d. the smaller the possibilities of substituting capital for labor.
a
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Economists predict that the __________ the cost of shirking to an individual, the __________ shirking that individual will undertake, ceteris paribus.
A) lower; less B) higher; less C) lower; more D) higher; more E) b and c
The quantity of loanable funds demanded increases if the real interest rate falls, all other things remaining the same, because the real interest rate
A) is the opportunity cost of investment. B) is not related to the price of bonds and stocks. C) affects the supply of saving which, in turn, determines the quantity of investment. D) affects the quantity of saving supplied. E) determines the cost of living.
The EITC creates an incentive to understate income for workers whose earnings are less than the wage ceiling for maximum credit
Indicate whether the statement is true or false
Monopolies use their market power to
a. charge prices that equal minimum average total cost. b. increase the quantity sold as they increase price. c. charge a price that is higher than marginal cost. d. dump excess supplies of their product on the market.