The figure above shows the U.S. supply of labor curve. An increase in the income tax rate leads to a
A) movement downward along the supply of labor curve from a point such as A to a point such as B.
B) leftward shift of the supply of labor curve.
C) rightward shift of the supply of labor curve.
D) movement upward along the supply of labor curve from a point such as C to a point such as B.
E) None of the above answers is correct because there is no change in the supply of labor curve.
B
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If you expect the economy is going to boom and average income in the economy will rise in the foreseeable future, the type of firm that would be able to increase its sales if your expectations are met is
A) one that sells a luxury good. B) one that sells a necessity good. C) one that sells an inferior good. D) one that sells a price-inelastic good.
Although he is very poor, Al plays the million-dollar lottery every day because he is certain that one day he will win. Al makes this calculation based upon
A) the frequency of past outcomes. B) subjective probability. C) knowledge of all possible outcomes. D) tossing a coin.