In Figure 30.1, the movement from point G to point F along the labor supply curve S1 is a result of
A. The substitution effect of a higher wage rate.
B. Increased job satisfaction.
C. A lower wage rate.
D. The income effect of higher wages.
Answer: C
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The equation of exchange is a formula indicating that the number of monetary units times
A) the number of times each monetary unit is spent on final goods and services is identical to the price level times real GDP. B) real GDP is identical to the price level times the number of times each monetary unit is spent on final goods and services. C) nominal GDP is identical to the price level times the number of times each monetary unit is spent on final goods and services. D) the price level is identical to the number of times each monetary unit is spent on final goods and services times real GDP.
What are Pigouvian taxes and subsidies? How do governments decide when to levy a tax or provide a subsidy?
What will be an ideal response?