In the indifference curve-budget line model of labor supply, the vertical intercept of the budget line represents
a. the worker's nonlabor income.
b. the wage rate paid to the worker.
c. the number of leisure hours enjoyed by the worker.
d. the number of hours of labor that the worker supplies.
a. the worker's nonlabor income.
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An unexpected decrease in aggregate demand
A) will decrease long-run aggregate supply. B) will decrease the average duration of unemployment. C) will decrease the price level. D) will decrease real GDP, but will not affect the rate and duration of unemployment.
Dallas buys strawberries, and he would be willing to pay more than he now pays. Suppose that Dallas has a change in his tastes such that he values strawberries more than before. If the market price is the same as before, then
a. Dallas's consumer surplus would be unaffected. b. Dallas's consumer surplus would increase. c. Dallas's consumer surplus would decrease. d. Dallas would be wise to buy fewer strawberries than before.