In response to an increase in total factor productivity
A) both the substitution effect and the income effect suggest that hours worked should increase.
B) the substitution effect suggests that hours worked should increase, while the income effect suggests that hours worked should decrease.
C) the substitution effect suggests that hours worked should decrease, while the income effect suggests that hours worked should increase.
D) both the substitution effect and the income effect suggest that hours worked should decrease.
B
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When the absolute price elasticity of demand is less than 1, demand is
A) elastic. B) unit-elastic. C) inelastic. D) undetermined without more information.
A monopoly industry: a. has very significant barriers to entry
b. faces a downward sloping demand curve. c. may earn economic profits or losses in the short run. d. has all of the above characteristics.