An increase in the real value of stock prices, which is independent of a change in the price level, would best be an example of the:
a. Foreign purchases effect
b. Wealth effect
c. Interest-rate effect
d. Real-balances effect
b. Wealth effect
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Robert is a doctor who earns an average hourly wage of $80. His wife is a teacher and earns an average hourly wage of $35. His daughter works in her college library and earns $12 per hour while his son is a lawyer and earns $60 per hour
If one of them must stay back at the house on a working day to look after their ailing pet, who can do it at the lowest opportunity cost? A) His son B) Robert C) His wife D) His daughter Mike and John work as waiters in a restaurant. Mike can efficiently wait on 10 customers per hour while John can efficiently wait on 7 customers per hour. The restaurant also has a bar. If both of them work as bartenders, Mike is able to serve 9 customers per hour while John is able to serve 10 customers per hour.
Consumers will always pay the entire amount of a specific tax whenever
A) demand is perfectly inelastic. B) supply is perfectly elastic. C) Both A and B above. D) Either A or B above but not at the same time.
In labor markets, a change in the wage rate has both an income and a substitution effect. An increase in wages causes an increase in real income but at the same time it increases the relative price of leisure for the worker. If an increase in wage rate causes an individual to work less, _____
a. the income effect dominates the substitution effect b. the substitution effect dominates the income effect c. the substitution and income effects cancel each other out d. then leisure will be referred to as an inferior good e. the increase in wage rates will cause an increase in the supply of labor
With ______ returns to scale, production is most efficient if there is ______.
A. decreasing; a single producer B. increasing; a large number of producers C. constant; a single producer D. increasing; a single producer