Suppose that Elmer's hourly wage increases, and he decides to work fewer hours. For Elmer, the substitution effect of the wage change is
a. only partially offset by the income effect.
b. more than offset by the income effect.
c. exactly offset by the income effect.
d. We do not have enough information with which to answer the question.
b
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In a perfectly competitive market, a marginal entrant:
A) earns positive economic profits in the long run. B) is the first firm to enter a market. C) is indifferent between entering and not entering. D) determines the market price of the good it produces.
"There is a direct relationship between economic growth rates and the wealth of a nation." Do you agree or disagree? Why?
What will be an ideal response?
The ____ participate in the labor force to a greater extent than do the ____
a. very young; middle-aged and very old b. middle-aged; very young and very old c. very old; very young and middle-aged d. very young and very old; middle-aged
Americans viewed the 12 percent mortgage interest rates of the 1980s as exorbitantly high while they considered the 7 percent mortgage interest rates of the late 1990s as reasonable. This represents a confusion of
a. actual and expected inflation. b. real versus nominal inflation. c. real versus expected mortgage payments. d. real versus nominal interest rates.