As the real wage rate rises, the opportunity cost of
A) working rises.
B) saving rises.
C) leisure rises.
D) buying goods and services rises.
E) leisure falls.
C
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How does the substitution effect work when the price of an item drops?
(A) The substitutes for the item also suffer a drop in prices. (B) Consumers buy the item even if they do not particularly want it. (C) The item becomes less and less popular as its price drops. (D) Consumers buy the item as a substitute for other more costly items.
Which of the following is not a reason why unionized firms can successfully compete with nonunionized firms?
A. Unionized firms are legally protected from price competition with nonunionized firms. B. Employee morale may be higher at unionized firms, so workers are more productive. C. Labor turnover is lower at unionized firms, so unionized firms have lower hiring costs. D. Communication between management and workers is better at unionized firms.