Explain why people might work less if the wage increases.
What will be an ideal response?
This is known as the income effect of an increase in the wage rate. When the wage rate goes up, so does the real value of income for the person whose wage went up. Since the person now has more income, he or she might choose to increase the amount of leisure time that he or she consumes, if leisure is a normal good. Thus, by increasing the amount of leisure consumed, the person would decrease the amount of hours that he or she works.
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The Federal Reserve reports that it has coins valued at $10 billion, bank reserves at the Fed of $15 billion, gold valued at $10 billion, Federal Reservesnotes of $400 billion, and U.S. government securities of $300 billion
What is the size of the monetary base?
Frederick Taylor
a. studied the movements of workers as they performed job tasks. b. advocated the use of incentives for superior performance. c. carried on experiments to determine the optimum size and weight of tools. d. developed principles pertaining to the correct routing of work and accurate scheduling of production orders. e. All of the above.
Which of the following equations is always correct in an open economy?
a. NX = Y - C - G - I b. NX = S - I c. NX = NCO d. All of the above are correct.
The law of comparative advantage indicates that if a group of individuals wants to maximize their joint output, then each good should be supplied by
A) the person with the most advanced technical knowledge. B) the person that can accomplish the task most rapidly. C) the person with the lowest wage rate. D) the low opportunity cost producer.