Explain how an increase in the public's taste towards less leisure would affect the labor market, the production function, and aggregate output. Provide graphs to illustrate
What will be an ideal response?
An decrease in the demand for leisure would shift the labor supply curve to the right (up), which would decrease the real wage and increase the quantity of labor. This increase in the quantity of labor would lead to a movement along the production function towards higher output.
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Why is the market demand curve for public goods calculated as a vertical summation of individual demand curves?
What will be an ideal response?
A perfectly horizontal demand curve has
A) zero elasticity. B) some positive finite elasticity. C) negative elasticity. D) perfect elasticity.
According to James Duesenberry, knowing someone's absolute income tells us everything about that person's income status
Indicate whether the statement is true or false
Demand tends to be:
A. more inelastic in the short term than in the long term. B. more elastic in the short term than in the long term. C. equally elastic in the short term and in the long term. D. None of the statements is correct.