The substitution effect of wages explains shifts in the labor supply curve.
Answer the following statement true (T) or false (F)
False
The substitution effect of wages occurs when an increased wage rate encourages people to work more hours (to substitute labor for leisure) and vice versa. The substitution effect causes the supply curve to be upward-sloping, not to shift.
Economics
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If a marginal cost pricing rule is imposed on the natural monopoly in the figure above, then total surplus will be
A) $0. B) $4 million. C) $8 million. D) $16 million.
Economics
The number of transactions a typical dollar is used in during a given period is called the:
A. velocity of money. B. transaction rate. C. quantity theory of money. D. transaction velocity.
Economics