When leisure is a normal good, the wage elasticity of labor supply is always positive.
Answer the following statement true (T) or false (F)
False
Rationale: When leisure is a normal good, labor supply curves can slope up or down -- implying that both positive and negative wage elasticities are possible.
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The aggregate production function for real business cycle models is shown as
a. yt = F(Kt, Nt). b. yt = ztF(Kt - Nt). c. yt = ztF(Kt, Nt). d. yt = zt/(Kt, Nt).
The short run is
A) usually 3 - 6 months. B) dependent on the characteristics of the industry. C) when a firm has to decide whether or not to exit. D) identical to the long run for most firms.
If all fixed taxes in the United States were removed and only variable taxes remained, what would be the effect on the expenditures schedule?
a. The expenditure schedule will shift upward. b. The expenditure schedule will shift downward. c. The expenditure schedule will become flatter. d. The expenditure schedule will become steeper.
If some activity creates positive externalities as well as private benefits, then economic theory suggests that the activity ought to be:
A. left alone under the idea of laissez faire. B. subsidized. C. taxed. D. prohibited.