Because leisure is a normal good, an increase in the wage rate will result in
A) an increase in the quantity of labor supplied because of the substitution effect. At low wages the income effect causes an increase in the quantity of labor supplied, but at high wages the income effect causes a decrease in the quantity of labor supplied as the wage rises.
B) an increase in the quantity of labor supplied because of both the substitution effect and the income effect.
C) a decrease in the quantity of labor supplied because of the substitution effect and an increase in the quantity of labor supplied because of the income effect.
D) an increase in the quantity of labor supplied because of the substitution effect and a decrease in the quantity of labor supplied because of the income effect.
D
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The difference between currency outstanding and currency in circulation is equal to
A) vault cash. B) bank reserves. C) coins issued by the U.S. Treasury. D) zero; they are the same thing.
If a monopolist must lower the price on all units in order to sell an additional unit,
a. it is impossible for the monopolist to maximize profit b. the monopolist will always lose profit when it increases quantity c. the monopolist will always lose revenue when it increases quantity d. price will always be greater than marginal revenue e. price will always be less than marginal revenue