Question

1. Which of the following is not a property of standard indifference curves in a leisure-consumption model?

A.	Indifference curves tend to be downward sloping.

B.	Higher indifference curves (to the northeast) indicate higher levels of utility.

C.	Indifference curves tend to be convex to the origin.

D.	There is an indifference curve passing through every leisure-consumption bundle.

E.	Indifference curves intersect one another.

2. What is likely to happen to the labor market equilibrium for firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

A.	The number of firemen employed will increase while firemen wages will decrease.

B.	The number of firemen employed will decrease while firemen wages will decrease.

C.	The number of firemen employed will increase while firemen wages will increase.

D.	The number of firemen employed will decrease while firemen wages will increase.

E.	The number of firemen employed will remain the same while firemen wages will increase.

3. What is likely to happen to the supply of firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

A.	The supply of firemen will fall because there will be fewer fires.

B.	The supply of firemen will increase because there will be fewer fires.

C.	The supply of firemen will remain unchanged because the supply curve relates the number of fire fighters to the wage, not to the number of fires.

D.	The supply of firemen will increase as long as wages paid to workers on new construction projects is also increasing.

E.	The supply of firemen will decrease as long as the property tax-base increases when the new construction projects are completed.

4. What is likely to happen to the demand for firemen as building codes change to require firewalls and sprinklers to be included in all new construction?

A.	The demand for firemen will fall as the demand for fire protection services falls.

B.	The demand for firemen will increase as the supply of firemen falls when old buildings are replaced with newer buildings.

C.	The demand for firemen will remain unchanged as firemen don't build new construction.

D.	The demand for firemen will increase as long as wages paid to workers on new construction projects exceed the minimum wage.

E.	The demand for firemen will decrease as long as the property tax-base increases when the new construction projects are completed.

Answer 1

1. Indifference curves intersect one another. They cant intersect one another.

2.The number of firemen employed will decrease while firemen wages will decrease. the demand curve will shift downwards reducing the the number of firemen and wages of the firemen.

3.The supply of firemen will remain unchanged because the supply curve relates the number of fire fighters to the wage, not to the number of fires.

4.The demand for firemen will fall as the demand for fire protection services falls.