. A consumer has ·100 hours of time to allocate to either labor or leisure ·A real wage w=50 ·Dividends income of 500 ·Taxes for 1500 It is feasible for the consumer to purchase 3000 unit of consumption. A. True B. False
1. A consumer has
·100 hours of time to allocate to either labor or leisure
·A real wage w=50
·Dividends income of 500
·Taxes for 1500
It is feasible for the consumer to purchase 3000 unit of consumption.
A. True
B. False
2. A consumer has
·100 hours of time to allocate to either labor or leisure
·A real wage w=30
·Dividends income of 500
·Taxes for 1500
It is feasible for the consumer to purchase 3000 unit of consumption.
A. True
B. False
3. Supose that
·Total Factor Productivity increases
·Capital
Everything else equal, what happens to labor demand in the economy?
A. It decreases (i.e. shifts to the left of the demand curve)
B. It increases (i.e. shifts to the right of the demand curve)
C. Not enough information to answer
4. Supose that
·Total Factor Productivity decreases by 10%
·Capital depreciates by 10%
Everything else equal, what happens to labor demand in the economy?
A. It decreases (i.e. shifts to the left of the demand curve)
B. It increases (i.e. shifts to the right of the demand curve)
C. Not enough information to answer
5. Does an increase in the wage causes leisure always to increase, because leisure is a normal good?
A. Yes
B. No
C. Only if the substitution effect dominates the income effect
D. Only if the income effect dominates the substitution effect
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