The substitution effect of a decrease in the wage rate causes the quantity of labor supplied to
a. increase
b. increase only if the individual desires more leisure time
c. increase only if the substitution effect outweighs the income effect
d. decrease
e. decrease only if the individual lowers the value of leisure time
D
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Which of the following models results in the highest level of output assuming a fixed number of firms with identical costs and a given demand curve?
A) Cournot B) Stackelberg C) Monopoly D) Cartel
Why don't competitive markets do a good job providing public goods?
a. Because public goods generate negative externalities, and pollution taxes reduce the incentive for firms to supply public goods. b. Because it is difficult to exclude people from gaining benefits from public goods without paying for them, and so market demand does not reflect the benefits to society from the public good. c. Because firms cannot produce enough to satisfy market demand. d. Because people do not receive benefits from public goods.