The income effect of a wage rate increase should lead to
A. a decrease in the quantity of labor supplied and a decrease in leisure.
B. an increase in the quantity of labor supplied and an increase in leisure.
C. an increase in the quantity of labor supplied and a decrease in leisure.
D. a decrease in quantity of labor supplied and an increase in leisure.
Answer: D
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A price searcher confronts a downward sloping demand curve because
a. products in the market are differentiated. b. there is no close competitor in the market. c. the market is essentially monopolized. d. the firm gains nothing if it lowers its price.
When technology spillover occurs,
a. it is the government's responsibility to own firms that are engaged in high-tech research. b. a firm's research yields technological knowledge that can then be used by society as a whole. c. those firms engaged in technology research should be taxed by the government. d. firms invest in the latest production technology and the cost of that technology "spills over" to the prices consumers must pay for the product.