The input-substitution effect of an increase in the wage comes about because higher wages:
A. increase production costs, and final good prices will rise, reducing the quantity demanded of the product.
B. increase production costs, and final good prices will rise, increasing the quantity demanded of the product.
C. make labor less expensive as an input, leading firms to switch to labor as an input.
D. make labor more expensive as an input, leading firms to switch to other inputs.
Answer: D
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Both sugar and fructose can be used in the production of candy. If the price of sugar increases,
a. the demand for sugar increases b. sugar becomes relatively more expensive than fructose only if the price of fructose falls c. sugar becomes relatively more expensive than fructose, other things constant d. the price of fructose immediately increases e. the price of fructose immediately decreases
The fraction, or percentage, of total income which is saved is called the:
A. Average propensity to save B. Marginal propensity to save C. Disposable income schedule D. Saving schedule