In the figure above, if the quantity is restricted to 2, then the deadweight loss in this market equals

Real wages will decline if

A) money supply growth exceeds expectations. B) real interest rates rise. C) aggregate demand exceeds aggregate supply. D) money supply growth exceeds the inflation rate.

We assume leisure is a normal good. This implies that

A) an increase in taxes decreases the demand for leisure. B) households maximize utility. C) preferences over consumption are well defined. D) an increase in the wage increases demand for leisure.