A price elasticity of demand of -0.67 implies
a. Demand is inelastic
b. Demand is elastic
c. Demand is unitary elastic
d. Demand is perfectly elastic
a
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The labor supply curve is backward bending because
A) as the wage rate rises, the substitution effect becomes larger than the income effect. B) as the wage rate rises, the income effect becomes larger than the substitution effect. C) an increase in the wage rate shifts the supply of labor curve leftward at higher wages. D) an increase in the wage rate shifts the supply of labor curve rightward at higher wages.
Consider Paul's decision to go to college. If he goes to college, he will spend $90,000 on tuition, $15,000 on room and board, and $7,000 on books. If he does not go to college, he will earn $22,000 working at a construction job and he will spend $11,000 on room and board. Paul's cost of going to college is
a. $96,000. b. $110,000. c. $114,000. d. $123,000.