As a person's wage rate increases, the substitution effect motivates an increase in work and the income effect motivates a decrease in work
Indicate whether the statement is true or false
TRUE
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The money interest rate may be a misleading indicator of real borrowing costs when
a. the unemployment rate is high. b. the actual rate of unemployment exceeds the natural rate of unemployment. c. the inflation rate is high. d. real output is declining.
Marginal revenue is generally __________ for businesses that do not operate under conditions of perfect competition.
A. lower than the price B. higher than the price C. lower than the average cost D. lower than the marginal product
If two variables are directly related, the relationship will have a graph that:
A. Is a straight line B. May either be upward-sloping or downward-sloping C. Is an upward-sloping line D. Is horizontal
One reason economists distinguish between micro and macro is supply and demand are:
A. unrelated to one another. B. more interdependent in individual markets (micro). C. more interdependent in the aggregate (macro). D. never interdependent.