Which of the following statements regarding labor supply is false?
a. Jerry's labor supply curve can bend backward if the income effect of a higher wage rate outweighs the substitution effect.
b. Bob's labor supply curve will not bend backward if the wage rate is never so high that the income effect outweighs the substitution effect.
c. If there is a wage rate above which the income effect is at least as great as the substitution effect, the labor supply curve will be vertical or bend backward.
d. The labor supply curve will slope upward if the income effect dominates the substitution effect.
e. Hayden's offer to work more hours as the result of a wage increase suggests that the substitution effect dominates the income effect.
D
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The stockholder-manager conflict in a large publicly held firm is manifested in all of the following ways except
A) the managers implement very low-risk strategies that have very low returns. B) the managers implement strategies that maximize the value of the firm. C) managers pursue strategies that maximize firm size rather than the value of the firm. D) the managers attempt to maximize their salaries.
The cost-output elasticity is used to measure
A) input substitution flexibility. B) the slope of the firm's expansion path. C) the slope of long-run average cost. D) the slope of long-run marginal cost. E) economies of scale.
Compared to perfect competition, a monopolistically competitive market will produce ________ output and charge a ________ price
A) more; higher B) more; lower C) less; higher D) less; lower
If the price elasticity of demand for a good is 5, then a 10 percent increase in price results in a
a. 0.5 percent decrease in the quantity demanded. b. 2 percent decrease in the quantity demanded. c. 5 percent decrease in the quantity demanded. d. 50 percent decrease in the quantity demanded.