According to the income effect of labor supply, if leisure is a normal good, then an increase in the wage rate will ________ the quantity of labor ________.
A. increase; supplied
B. decrease; supplied
C. increase; demanded
D. decrease; demanded
Answer: B
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Technological advances generally result in
A) increased average number of hours worked per day. B) increased infant mortality rates. C) decreased incomes. D) increased life expectancy.
If a firm fired one worker and lost 12 units of production and decides to add one more unit of capital, then to remain on the same isoquant what must be TRUE?
A) The MPK of the next unit of capital added equals 12. B) The firm must force the other workers to work more. C) The firm will experience a decline in output. D) The marginal rate of technical substitution is greater than 12.
If a city government enacts a maximum price on rent,
A) quantity supplied will decrease. B) quantity demanded will increase. C) allocational problems develop. D) All of the above.
Long-run economic profits are possible in which of the following market structures?
A. Oligopoly and monopoly B. Monopolistic competition C. Perfect competition D. Only monopoly