Which of the following statements is true?
A) The slope of the labor supply curve depends only on the income effect of a wage rate change.
B) The income effect and the substitution effect of a wage rate change work in the same direction.
C) The income effect and the substitution effect of a wage rate change work in opposite directions.
D) The slope of the labor supply curve depends only on the substitution effect of a wage rate change.
C
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Suppose a frost destroys much of the Florida orange crop. At the same time, suppose consumer tastes shift toward orange juice. What would we expect to happen to the equilibrium price and quantity in the market for orange juice?
a. Price will increase; quantity is ambiguous b. Price will increase; quantity will increase c. Price will increase; quantity will decrease d. Price will decrease; quantity is ambiguous e. The impact on both sides is ambiguous
Regulation Q was intended to
A) maintain banks' profitability by limiting competition for funds. B) increase the reserves banks would hold against demand deposits. C) increase the reserves banks would hold against time deposits. D) eliminate the need for discount loans.