As we work fewer hours and our leisure time increases, the opportunity cost of labor
A. Rises and the marginal utility of income rises.
B. Falls and the marginal utility of income falls.
C. Falls and the marginal utility of income rises.
D. Rises and the marginal utility of income falls.
Answer: C
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In general, the __________ the welfare payment, the __________ the incentive to find work.
a. higher, high
b. lower, lower
c. lower, higher
If real wages fall as output rises, then in the classical model it must be the case that
a. labor demand rose. b. labor demand fell. c. labor supply rose. d. labor supply fell. e. none of the above.
One of the assumptions of an economic analysis is that market functions are controlled by the government
a. True b. False Indicate whether the statement is true or false
The main reason the usefulness of Pareto optimal policies is limited as a policy guide is that:
A. it is too subjective. B. real-world changes in which more people are helped than are harmed are rare. C. real-world changes in which no one is harmed are rare or nonexistent. D. it is only objective, and good policy also requires a subjective element.