If dividend income increases, the following does not happen
A) the consumer chooses to consume more leisure.
B) the consumer chooses to consume more consumption goods.
C) the budget constraint shifts to the right.
D) the substitution effect exceeds the income effect.
D
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Marylou, whose utility of wealth curve is shown in the figure above, faces two options. Option A yields $200 for sure. Option B has a 0.3 probability of yielding $100, and a 0.7 probability of yielding $300. Marylou, who is
A) picks option A. B) picks option B. C) is indifferent between option A and option B. D) needs more information to make a choice.
In the short run, if current output remains persistently above potential ________
A) inflation will rise causing a movement along the aggregate supply curve B) expected inflation will rise causing an upward shift of the aggregate supply curve C) the aggregate supply curve will shift until current output returns to its potential level D) all of the above E) none of the above
Suppose the demand for labor shifts rightward due to economic growth, but the supply of labor remains unchanged. How does this affect the market outcome under an efficiency wage equilibrium?
A) Efficiency wage and employment are higher B) Efficiency wage is lower, employment is higher C) Efficiency wage is higher, employment is lower D) Efficiency wage and employment are lower
All of the following are major factors limiting economic growth in developing countries EXCEPT
A) dead capital. B) deregulation. C) inefficient government regulation. D) corruption.