When the ________ effect dominates the ________ effect, the labor supply curve is ________
A) income; substitution; vertical
B) substitution; income; positively sloped
C) income; substitution; negatively sloped
D) substitution; income; horizontal
C
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The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve
A) shifts leftward. B) shifts rightward. C) does not shift at all, but the firm moves upward along the curve. D) None of the above because this change shifts the supply of labor curve.
Measures of poverty (for example, the poverty line) and the distribution of income (for example, the Lorenz curve and the Gini coefficient) are misleading for which of the following two reasons?
A) First, these measures fail to include the income U.S. citizens earn working for foreign firms that have operations located in the United States. Second, these measures fail to include income foreign citizens earn working for U.S. firms that have operations in foreign countries. B) First, these measures do not take into account income mobility over time. Second, these measures ignore the effects of government programs meant to reduce poverty. C) First, none of these measures are adjusted for inflation. Second, they do not measure income on a per capita basis. D) First, these measures fail to include dividend and interest income earned on stocks and bonds. Second, these measures fail to include the value of goods and services citizens make for their own consumption that are not sold in markets.
You are a baker. You paid $150K in wages, $50K for dough, $20K for power, $5K in interest for a business loan, $25K in taxes, and made a profit of $10K. How much did you contribution to GDP using the product approach?
A) $80K B) $85K C) $190K D) $260K
The main reason U.S. farmers can produce more than farmers in China is that they
A. have more land. B. have more capital. C. have more labor. D. are better trained.