For most low-wage earners
A) the substitution effect of a wage rate increase is likely to equal the income effect.
B) the opportunity cost of leisure is high.
C) the income effect of a wage rate increase is likely to be larger than the substitution effect.
D) the substitution effect of a wage rate increase is likely to be larger than the income effect.
D
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Watt Power and Light, an electric company, will suffer an economic loss
a. even at its profit-maximizing output because marginal cost is always less than average cost b. even at its profit-maximizing output because average cost is always less than marginal cost c. if regulators insist that it produce where price equals marginal cost because marginal cost is less than average cost d. if regulators insist that it produce where price equals marginal cost because average cost is always less than marginal cost e. if regulators insist that it produce where price equals average cost because average cost is always less than marginal cost
Exhibit 2-18 Production possibilities curves
In Exhibit 2-18, a country is located at point A on its Year X production possibilities curve. In Year Y this same country is located at point B on its Year Y production possibilities curve. Which of the following could have brought about this outward shift in production possibilities curves?
A. More efficient production in Year X. B. A natural disaster in Year X which leads to a destruction of resources. C. Higher unemployment in Year X. D. An advance in technology occurred in Year X.