Jenny's hourly wage rate was increased from $17 to $21. As a result of the wage increase, Jenny desires to work fewer hours and take more hours of leisure. For Jenny
A. the substitution effect must equal the income effect.
B. the income effect must be zero.
C. the income effect dominates the substitution effect.
D. the substitution effect dominates the income effect.
Answer: C
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Which of the following statements about the comparison between GDP in China and in the United States is CORRECT?
A) Using the exchange rate to value China's GDP in dollars shows that China's GDP per person exceeds the GDP per person in the United States. B) Using purchasing power parity prices to value China's GDP in dollars shows that China's GDP per person exceeds the GDP per person in the United States. C) China's GDP per person is higher using purchasing power parity prices rather than the exchange rate when valuing China's GDP in dollars. D) None of the above answers are correct because they are all false statements.
Why are economic growth and saving related?
What will be an ideal response?
Answer the following statement(s) true (T) or false (F)
1. Someone with a low marginal propensity to consume probably has a low marginal propensity to save. 2. Equilibrium in the aggregate expenditure model requires that aggregate expenditure equals income. 3. According to the aggregate expenditure model, when aggregate expenditure is greater than output, output decreases. 4. Politics can affect aggregate expenditure. 5. Accounting for investment, government purchases, and net exports increases the autonomous portion of aggregate expenditure.
One factors that limits a poor nation's economic growth is
A. increased urbanization. B. lack of entrepreneurial ability. C. insufficient labor. D. an overabundance of capital formation.