We see a backward-bending labor supply curve whenever
A. the income effect dominates the substitution effect over some range of wage rates.
B. the substitution effect dominates the income effect over some range of wage rates.
C. minimum wages are set too low.
D. minimum wages are set too high.
Answer: A
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At a profit-maximizing output level,
A. marginal revenue minus marginal cost equals zero. B. marginal profit equals zero. C. the slope of the total profit curve is zero. D. All of the responses are correct.
The IMF offers loans to developing countries in times of balance of payment constraints, but the IMF also faces strong criticisms because:
A. contractionary fiscal policy and expansionary monetary policy tend to be ineffective against balance of payment constraints. B. contractionary fiscal and monetary policies are always undesirable for any developing country. C. it employs economists that know little about developing countries and their economic affairs. D. the conditions tend to be procyclical, therefore worsening the recessions.
Other things equal, interest rates are:
A. higher on large loans than on small loans. B. higher on loans with tax-exempt interest payments. C. lower on less risky loans than on riskier loans. D. lower on short-term loans than on long-term loans.
Which of the following is not an example of government's role as an actor?
A. Social security tax cuts that reduce the percentage paid by employees B. Equal opportunity and labor laws that restrict businesses' freedom to hire and fire whomever they want C. Increases in social security spending D. Laws that require states and the federal government to balance their budgets