Homework Answers
9) Solution: lower; higher
Explanation: When leisure is an inferior good, the income effect of an increase in wage will decline the demand for leisure and increases the labor supply
10) Solution: an increase in demand today
Explanation: Expected future income and expected future prices influence demand today.
11) Solution: absolute advantage
Explanation: A country has a absolute advantage over another when it has productivity edge over other nations; it takes fewer resources to produce a product
12) Solution: everyone produces goods or service in which they have lowest opportunity cost
Explanation: When the opportunity cost of choosing to produce a specific good is lower for one country compared for others, then that country is said to have a comparative advantage
13) Solution: inefficiency
Explanation: The resources are being inefficiently utilized when society is producing at point inside the production possibilities frontier
14) Solution: it is above the equilibrium price
Explanation: A government imposed maximum price will not impact economy when it is above the equilibrium price
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labor supply Ae leisure is an inferior goud instead of a normal good. The income effect...
3. Suppose that the demand for coffee increase and, at the same time, the supply of...
3. Suppose that the demand for coffee increase and, at the same time, the supply of coffee decreases. If other things remain unchanged. Knowing that tea is a substitutable product for coffee, what would happen in the tea market? a) Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b) Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. c) Equilibrium quantity would decrease, but the impact on equilibrium price would be...
If wages increase, will a worker supply more labor? O A. Only if the effect of...
If wages increase, will a worker supply more labor? O A. Only if the effect of the increase in purchasing power is larger than that of the opportunity cost of leisure increasing. OB. Yes because the opportunity cost of leisure is higher. O C. Only if the effect of the opportunity cost of leisure increasing is larger than that of the increase in purchasing power. O D. Yes because the substitution and income effects both cause workers to supply a...
When leisure is a normal good, the income effect from a decrease in wages is evident...
When leisure is a normal good, the income effect from a decrease in wages is evident in a. a desire to consume more leisure. b. a desire to consume less leisure. c. an upward-sloping labor-supply curve. d. a shift in labor demand.
Marginal cost is the opportunity cost of a good or service divided by the number of...
Marginal cost is the opportunity cost of a good or service divided by the number of units produced. of a good or service that exceeds its benefit. that your activity imposes on someone else. that arises from producing one more unit of a good or service. The law of demand implies that demand curves shift leftward whenever the price rises. slope down. shift rightward whenever the price rises. slope up. If the United States can increase its production of automobiles...
Which of the following would cause an increase in the demand for good X (an inferior...
Which of the following would cause an increase in the demand for good X (an inferior good)? an increase in the price of good Y which is a complement to good X a decrease in the number of consumers an expectation of a lower price for good X a decrease in income a decrease in the price of good Z which is a substitute for good X In response the Covid-19 pandemic, many people want to purchase hand sanitizer. Simultaneously,...
[2] A good or service produced in Country A and sold in Country B is: A)...
[2] A good or service produced in Country A and sold in Country B is: A) an import to Country B. B) an export from Country B. C) a secondary purchase for Country B. D) an unaccounted good or service for Country B. [3] Specialization: A) increases dependence on markets and trade. B) permits greater levels of production than would be attained without it. C) both of the above. D) none of the above. [4] You would expect an increase...
The difference between an “inferior” good and a “normal” good in Economics is: a. The demand...
The difference between an “inferior” good and a “normal” good in Economics is: a. The demand for a normal good decreases as the price increases, which is not the case for an inferior good b. The demand for a normal good increases as the price increases, which is not the case for an inferior good c. The demand for a normal good decreases as household income increases, which is not the case for an inferior good d. The demand for...
needed all the answers for the questions 13. If leisure is a normal good and the...
needed all the answers for the questions
13. If leisure is a normal good and the wage falls A. B. C. D. the substitution income effect will induce the consumer to take more leisure. the substitution effect will induce the consumer to take less leisure and the income effect will induce the consumer to take more leisure. the substitution effect will induce the consumer to take more leisure and the income effect will induce the consumer to take less leisure....
37) Refer to Table 7-4. Which country has an A) Estonia B) Morocco C) both countries...
37) Refer to Table 7-4. Which country has an A) Estonia B) Morocco C) both countries D) neither country advantage in producing 38) Refer to Table 7-6. What is the opportunity cost to produce 1 be in Eston A) 1/3 of a sword B) 3/5 of a sword C) 1.67 swords D) 5 swords 39) Refer to Table 7-6. What is the opportunity cost to produce 1 betin Morocco A) 1/2 of a sword B) 1 sword C) 1.5 swords...
We measure the marginal ________ of a good by what a ________ for another unit of...
We measure the marginal ________ of a good by what a ________ for another unit of the good. cost; person is willing to pay cost; person's preferences are benefit; person must pay benefit; person is willing to pay Each point on the production possibilities frontier achieves allocative efficiency. True False If a country must decrease current consumption to increase the amount of capital goods it produces today, then it must be producing outside the production possibilities frontier and will continue...
3. Suppose that the demand for coffee increase and, at the same time, the supply of coffee decreases. If other things remain unchanged. Knowing that tea is a substitutable product for coffee, what would happen in the tea market? a) Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous. b) Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous. c) Equilibrium quantity would decrease, but the impact on equilibrium price would be...
If wages increase, will a worker supply more labor? O A. Only if the effect of the increase in purchasing power is larger than that of the opportunity cost of leisure increasing. OB. Yes because the opportunity cost of leisure is higher. O C. Only if the effect of the opportunity cost of leisure increasing is larger than that of the increase in purchasing power. O D. Yes because the substitution and income effects both cause workers to supply a...
needed all the answers for the questions
13. If leisure is a normal good and the wage falls A. B. C. D. the substitution income effect will induce the consumer to take more leisure. the substitution effect will induce the consumer to take less leisure and the income effect will induce the consumer to take more leisure. the substitution effect will induce the consumer to take more leisure and the income effect will induce the consumer to take less leisure....
37) Refer to Table 7-4. Which country has an A) Estonia B) Morocco C) both countries D) neither country advantage in producing 38) Refer to Table 7-6. What is the opportunity cost to produce 1 be in Eston A) 1/3 of a sword B) 3/5 of a sword C) 1.67 swords D) 5 swords 39) Refer to Table 7-6. What is the opportunity cost to produce 1 betin Morocco A) 1/2 of a sword B) 1 sword C) 1.5 swords...
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