Assume leisure is a normal good. The substitution effect of a wage increase implies a ________ demand for leisure and a ________ labor supply.
A. lower; lower
B. higher; lower
C. lower; higher
D. higher; higher
Answer: C
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Why do governments in less-developed nations impose tariffs?
A) The nation's total income will be increased. B) The government gains revenue from the tariff. C) The government diversifies its economy. D) The national security of the country definitely is improved. E) The government's low-paid workers are protected from high-paid foreign workers.
A perfect price discriminating equilibrium maximizes
A) consumer surplus. B) the associated deadweight loss. C) the market inefficiency. D) total welfare.
The budget line is a(n):
a. convex curve. b. vertical line. c. concave curve. d. downward-sloping straight line. e. upward-sloping straight line.
The velocity of money increases with a _____, other things constant
a. fall in the inflation rate b. rise in the inflation rate c. rise in the employment rate d. fall in the exchange rate e. rise in the real interest rate