For most low wage earners A the income effect of a wage rate increase is likely

For most low wage earners a the income effect of a

This preview shows page 2 - 4 out of 4 pages.

56) For most low-wage earners, A) the income effect of a wage rate increase is likely to be larger than the substitution effect.B) the opportunity cost of leisure is high.C) the substitution effect of a wage rate increase is likely to equal the income effect.D) the substitution effect of a wage rate increase is likely to be larger than the income effect.Answer: D 56) Diff: 2 Page Ref: 551/551 Topic: Substitution and Income Effects of a Wage Change Learning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factor supply and labor in factor markets AACSB: Reflective Thinking 17
Image of page 2
57) Francis Crawford recently received a 20 percent wage increase and desires to work less. We canconclude that at his current wage his supply of labor curve 57) Diff: 1 Page Ref: 551/551 Topic: The Supply of Labor Learning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factor supply and labor in factor markets AACSB: Reflective Thinking 58) The income effect of a wage increase will cause a worker to devote 58) Diff: 2 Page Ref: 551/551 Topic: Substitution and Income Effects of a Wage Change Learning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factor supply and labor in factor markets AACSB: Reflective Thinking 59) Along an upward sloping labor supply curve, as the wage rate increases, the opportunity cost ofleisure ________, causing individuals to supply a ________ quantity of labor. 59) Diff: 2 Page Ref: 551/551 Topic: The Supply of Labor Learning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factor supply and labor in factor markets AACSB: Reflective Thinking
Image of page 3
Image of page 4

You've reached the end of your free preview.

Want to read all 4 pages?

  • Fall '13
  • Prime number, AACSB, Page Ref, factor demand

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture