According to the substitution effect of labor supply, when the wage rate goes up: O A. the opportunity cost of enjoying leisure goes down. B. it becomes less costly to consume leisure, so people will work more. OC. it becomes more costly to consume leisure, so people will work more. D. firms will hire more workers since people are more willing to work.
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- 69. If the price of labor falls relative to the price of capital, and as a result the quantity of capital employed decreases, it can be concluded that: A. The substitution effect is greater than the output effectB. The output effect is greater than the substitution effectC. The income effect is greater than the output effectD. Labor cannot be easily substituted for capital6. If leisure is an inferior good, what can you say about the slope of the labor supply curve?How can we measure the opportunity cost of leisure? The opportunity cost of leisure is O A. economic discrimination. B. the marginal product of labor. c. a compensating differential. O D. the wage rate. O E. pure rent. The substitution effect of a wage increase O A. causes a worker to supply a larger quantity of labor, and the income effect causes a worker to supply a smaller quantity of labor. B. causes a worker to supply a larger quantity of leisure, but the income effect causes a worker to supply a smaller quantity of leisure. C. causes a worker to supply the same quantity of labor, and the income effect causes a worker to supply a smaller quantity of leisure. D. causes a worker to supply a smaller quantity of labor, and the income effect causes a worker to supply a larger quantity of labor. Why is the supply curve of labor usually upward sloping? O A. As the wage increases, the opportunity cost of labor increases, causing individuals to devote more time to working. B. As the wage…
- 25 of 38 Jill works as a computer specialist for a local manufacturing firm. If Jill receives a raise in her hourly wage and decides she would like to increase her hours of work, we know that: O A. her income effect is greater than her substitution effect. O B. her substitution effect is greater than her income effect. O C. her income and substitution effect reinforce each other. O D. her income and substitution effects are equal. UnsureDamon's wage rises. The substitution effect would cause him to his work hours, and the income effect would cause him to his work hours. decrease; increase O increase; increase increase; decrease O decrease; decreaseIn economics we use "marginal analysis". in order to frame decisions as opportunity costs. Among the many terms that we learned which begin with the word "marginal,". what is the best definition of Marginal Utility? • A. marginal utility is the increase in total utility when income increases by $1 • B. marginal utility is the worker's wage divided by the worker's marginal product • C. marginal utility is the worker's wage divided by the price of the product • D. marginal utility is the increase in total utility when one more unit of product or service is consumed
- QUESTION 4 Which of the following statement about the Marginal Rate of Technical Substitution (MRTS) is FALSE? a. MRTS is similar to Marginal Rate of Substitution in consumer theory. b. MRTS reflects the trade-off between an input and the output. c. MRTS is usually negative. Od. MRTS is the slope of the isoquant.Select below the answer that best completes the sentence. When an individual decides to allocate their time between labour and leisure, the opportunity cost of leisure is due to the fact that: O leisure reduces how much time left the individual has for consumption. O every hour of leisure is an hour not earning labour income. O leisure decreases the marginal utility of consumption. O most leisure activities are costly.Economics: Labor Economics Question: 1 If unskilled labor and robotics are substitutes in production a decrease in the price of robotics is predicted to a. decrease the demand for unskilled labor if the scale effect outweighs the substitution effect. b. decrease the demand for unskilled labor if the substitution effect outweighs the scale effect. c. unambiguously increase the demand for unskilled labor. d. unambiguously decrease the demand for unskilled labor. Question: 2 Assuming capital is fixed in the short run and variable in the long run what would likely happen to wages in the short and long run following a wave of immigration? a. a large decrease in the short run, followed by a smaller decrease in the long run b. a small decrease in the short run followed by a larger decrease in the long run c. an increase in the short run followed by a large decrease in the long run d. a decrease in the short run followed by an increase in the long run Question: 3 Which of the following…
- Assume that, in response to a wage increase, Professor C retires sooner. a. (4) Explain -VERY BRIEFLY- the income effect of the wage increase (on both consumption and leisure)? b. (4) Explain - VERY BRIEFLY- the substitution effect of the wage increase (on both consumption and leisure)? c. (2) Explain - VERY BRIEFLY- whether the substitution or income effect is larger (in terms of leisure / labour).What is the effect if the cost of labor increases? O Price increases, quantity increases O Price decreases, quantity decreases O Price decreases, quantity increases O Price increases, quantity decreasesWhat is the best example of a marginal change? After graduating from university, Neville's income increases from $1000 per month to $1,100 per month. Jadelyn completes the six-month probationary period at her job and is now paid $11.25 per hour instead of $11.00. Housing prices in an area increase by 50% when a new freeway is built in a small town. O A hard freeze wipes out half of the potato crop in Prince Edward Island and the price of potatoes doubles.