A. income effect is zero
B. substitution effect outweighs the income effect
C. income effect outweighs the substitution effect
D. income effect and the substitution effects are equal
Related Mcqs:
- Assuming leisure is a normal good, if the income effect is greater than the substitution effect a wage increase ?
A. will have no effect on labour supply
B. will decreases labour supply
C. could cause either an increases or a decrease in labour supply
D. will increase labour supply. - Suppose that the supply curve of tin is highly inelastic. If the demand curve of tin decrease and increase cyclically along the supply curve of tin, then in this market the size of the quantity fluctuation will bathe size of the price fluctuations ?
A. relatively greater than
B. relatively less than
C. the same as
D. Any of the above - Assuming a downward sloping demand curve and upward sloping supply curve a higher equilibrium price may be caused by ?
A. An fall in demand
B. An increase in supply
C. improvements in production technology
D. An increase in demand - Suppose that the demand curve for tin is highly inelastic. If the supply curve of tin decrease and increase cyclically along the demand curve for tin then in this market the size of the price fluctuation will be __________ the size of the quantity fluctuations?
A. relatively greater then
B. relatively less than
C. the same as
D. any of the above - In the short run, the competitive firm’s supply curve is the portion of the marginal cost curve that lies above the average variable cost curve?
A. Upward-sloping portion of the average total cost curve
B. upward-sloping portion of the average variable cost curve
C. portion of the marginal cost curve that lies above the average total cost curve.
D. entire marginal cost curve.
E. portion of the marginal-cost curve that lies above the average variable cost curve - In a competitive labour market firms will hire labour up to the point where the marginal revenue product of labour equals ?
A. total labour cost
B. the marginal product
C. the price of the product
D. the wage rate - For a competitive firm, its short run supply curve is ______ and its long run supply curve is _____?
A. SMC, LMC
B. SMC above SAVC, LMC above LAC
C. SMC below SAVC, LMC above LAC
D. SMC below SAVC, LMC bellow LAC - If leisure is a normal good, an increase in the wage ?
A. will always increase the quantity of labor supplied
B. will increase the amount of labor supplied if the substitution effect outweighs the income effect
C. will increase the amount of labor supplied if the income effect outweighs the substitution effect
D. will always decrease the amount of labor supplied - The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve ?
A. At their lowest points
B. When they are declining
C. When they are increasing
D. When marginal revenue is zero - According to supply side economists as tax rates are reduced labour supply should increase. This implies that ?
A. There is no income effect when tax rates are changed
B. The income effect of a wage change is greater than the substitution effect of a wage change.
C. There is no substitution effect when tax rates are changed
D. The substitution effect of a wage change is greater than the income effect of a wage change
