By itself, the substitution effect of an increase in the wage rate will
a. always lead to an increase in the quantity of labor supplied
b. always lead to a decrease in the quantity of labor supplied
c. lead to an increase in the quantity of labor supplied only if leisure is like a normal good
d. lead to an increase in the quantity of labor supplied only if leisure is not a normal good
e. lead to an increase in the quantity of labor supplied only if the income effect works in the same direction
A
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When the Fed sells government securities, it
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans b. raises the cost of borrowing from the Fed, discouraging banks from making loans c. increases the amount of excess reserves that banks hold, encouraging them to make loans d. increases the amount of excess reserves that banks hold, discouraging them from making loans e. decreases the amount of excess reserves that banks hold, discouraging them from making loans
The average variable cost, the average total cost, and the marginal cost start to diminish only after the firm reaches the point of efficient scale
a. True b. False Indicate whether the statement is true or false