Exam 17: Wages, Rent, Interest, and Profit

Suppose leisure is shown on the horizontal axis and weekly income is shown on the vertical axis,an increase in the wage rate will cause the budget line to:

Tom started working five hours more each week,after receiving a $5 per hour increase in his hourly wage.This indicates that:

The purpose of unions formed by workers is to:

Which of the following factors will contribute to an increase in the marginal productivity of labor?

Management consultants work in pleasant surroundings at low risk of injury,but they generally receive higher pay than sanitation workers who face a health risk by working in unpleasant conditions.Based on this information,which of the following must be true?

Consider a production possibility frontier [PPF] for the current year that measures the output of capital goods on the horizontal axis and the output of consumer goods on the vertical axis.Which of the following statements is true?

Which of the following best explains the backward bending portion of the labor supply curve?

As a result of the substitution effect of a lower wage,hours of work will:

The more inelastic the labor supply curve:

Suppose the government imposes a policy which does not allow interest rates in the home mortgage market to rise above a certain level.Given that this level is set below the equilibrium interest rate,which of the following is a consequence of this policy?

Consider a machine that lasts two years before it wears out and adds $100 to output in each of these two years.If the rate of return per year is 5%,calculate the initial cost of the machine.

Which of the following correctly supports the argument for the presence of unions in an industry?

Which of the following is an implicit cost of a college education?

In the income-leisure model of work,leisure is the portion of time when:

Cash advance stores offer to lend money to an individual who,after a brief credit check,gives the store a post dated check for a certain amount and they receive a lesser amount.For example,the customer,who has no other options for loans given his or her poor credit,writes a check dated two weeks from today for $100 and the store remits to him $80,an annualized rate of interest of about 650%.Some states have outlawed cash advance stores as described here.Using what you've learned in this chapter,and assuming the rate of default on these loans is 20%,defend this practice.

When investment is financed through borrowing,an increase in the interest rate will lead to:

In the long-run,capital will be allocated across industries such that:

As compared to a labor market without a union,_____ in a labor market with an effective union.

Consider a machine that costs $50,has an economic life of one year,and produces output worth $63.The rate of return on capital is _____%.

The income-leisure model of work is based on the assumption that: