When does a higher wage rate lead to an increase in the number of work hours supplied by laborers?
a. Always.
b. When the substitution effect outweighs the income effect.
c. When the income effect outweighs the substitution effect.
d. Never.
b. When the substitution effect outweighs the income effect.
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Because knowledge capital is nonexcludable and nonrival, firms have an incentive to ________ the research and development of other firms
A) free ride on B) ignore C) not use D) make bids on
If a 50 percent increase in the price of pizza results in a 25 percent decrease in the quantity demanded of pizza, then the price elasticity of demand for pizza:
a. is equal to 0.5 and demand for pizza is inelastic. b. is equal to 0.5 and demand for pizza is elastic. c. is equal to 2 and demand for pizza is elastic. d. is equal to 2 and demand for pizza is inelastic. e. cannot be determined from the information provided.
A 10 percent decrease in the price of potato chips leads to a 30 percent increase in the quantity of soda demanded. What does this indicate?
a. Elasticity of demand for potato chips is 3. b. Cross-price elasticity of demand for soda is -3. c. Elasticity of demand for potato chips is 3. d. Elasticity of demand for soda 3.
The Federal reserves policy regarding announcing its policy decisions has:
A. always been to announce it immediately; that was part of the original Federal Reserve Act of 1913. B. only recently gone to immediate announcement; until 1994 these policy decisions were secret. C. changed so that now the Fed does not release its decisions publicly. D. been to release the decisions immediately since its early failure at preventing the Great Depression.