Quiz_174 - Figure17-3 64 RefertoFigure17-3. W1 toW2 64 A -elastic B C D Thesubstitution

Quiz_174 - Figure17-3 64 RefertoFigure17-3. W1 toW2 64 A...

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Figure 17-364)Refer to Figure 17-3.Which of the following is true if the wage rate increases fromW1toW2?A) The supply curve is unit-elastic.B) The income effect and the substitution effect are equal.C) The income effect is larger than the substitution effect.D) The substitution effect is larger than the income effect.Answer: C64)Diff: 2Page Ref: 551/551Topic: Substitution and Income Effects of a Wage ChangeLearning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factorsupply and labor in factor marketsAACSB: Analytic Skills65)Refer to Figure 17-3.Which of the following is true atW0?65)Diff: 3Page Ref: 551/551Topic: Substitution and Income Effects of a Wage ChangeLearning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factorsupply and labor in factor marketsAACSB: Analytic SkillsTRUE/FALSE. WriteʹTʹif the statement is true andʹFʹif the statement is false.66) If the market wage rate increases, a firmʹs labor demand curve does not shift but the labor supplycurve shifts to the right.66)Answer:TrueFalseDiff: 2Page Ref: 551/551Topic: The Supply of LaborLearning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factorsupply and labor in factor marketsAACSB: Reflective Thinking21
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67) If the substitution effect of a wage increase dominates the income effect, the labor supply curve hasa positive slope.67)Answer:TrueFalseDiff: 2Page Ref: 551/551Topic: Substitution and Income Effects of a Wage ChangeLearning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factorsupply and labor in factor marketsAACSB: Reflective Thinking68) The income effect of a wage decrease examines the effect of the decrease in wage income on aworkerʹs ability to purchase goods and services.
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