The reason we study the sequential labor negotiation game:
a. Is to show that these games usually go on for rounds and rounds
b. Is to show the importance of the first mover being able to commit to an offer
c. Is to show the importance of the second mover being able to commit to an offer
d. Is to show the problems of prisoners dilemmas
c
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The typical labor supply curve is upward sloping but it is possible for the curve to be backward bending —negatively sloped—at very high wage levels. Which of the following would cause a backward-bending supply curve?
A) This would occur if leisure is an inferior good. B) This would occur when the substitution effect from an increase in the wage becomes larger than the income effect. C) This would occur when a large number of workers choose leisure rather than employment at low wages; only a very large increase in the wage will lead these workers to prefer employment to leisure. D) This would occur when the income effect from an increase in the wage becomes larger than the substitution effect.
National saving equals private saving plus government saving, which in turn equals
A) C + S + T. B) GDP + C + G. C) GDP + NFP. D) GDP + NFP - C - G.