Appendix: In regression analysis, the existence of a high degree of intercorrelation among some or all of the explanatory variables in the regression equation constitutes:

What happens to labor supply in the pear-picking market when the wage paid to apple pickers increases?

a. The labor supply will stay unchanged until the wages paid to pear pickers change. b. The labor supply will decrease. c. The labor supply will increase. d. The labor supply may fall or rise, depending on the price of pears.

Consider the ordinary and compensated demand curves for a normal good. If the price of the good falls, then

a. the ordinary demand curve will show the larger increase in quantity demanded. b. the compensated demand curve will show the larger increase in quantity demanded. c. the increase in quantity demanded will be the same for the ordinary and compensated demand curves. d. we cannot predict whether ordinary or compensated demand will show the larger response in quantity demanded.