If a person supplies more hours of labor in response to a wage increase, then
A) the substitution effect is greater than the income effect.
B) the income effect is greater than the substitution effect.
C) the income effect equals the substitution effect.
D) the person is not maximizing utility.
A
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Airbus is a European jet airline producer. Indian Airlines wants to buy 23 Airbus planes from Airbus, due to increased demand for world travel. As a result
A) the demand curve for European euros and the supply curve for Indian rupees both shift rightward. B) the demand curve for European euros shifts rightward and the supply curve for Indian rupees shifts leftward. C) only the demand curve for Indian rupees shifts rightward. D) only the demand curve for European euros shifts rightward.
Which of the following applies to the tragedy of the commons? I. In the absence of government action, there is an absence of incentives to prevent the overuse of the common resource. II
When consumers take account of the marginal social benefit and marginal social cost, overuse of the resource occurs. III. Even with government action, it is impossible for an efficient level of output to be achieved. A) I only B) I and II C) II and III D) I, II and III
When a positive externality exists,
A. external benefits are necessarily greater than private benefits. B. social benefits are greater than private benefits. C. social benefits are less than private benefits. D. social benefits equal private benefits. E. none of the above
The revenue that a government raises by printing money is called
A) seignorage. B) monetary revenue. C) currency credit. D) currency inflation.