Question : Figure 17-3 12) Refer to Figure 17-3.  Which of the panels : 1387977

 

Figure 17-3

 

 

12) Refer to Figure 17-3.  Which of the panels in the diagram best represents an individual’s labor supply curve?

A) Panel A

B) Panel B

C) Panel C

D) Panel D

 

13) Refer to Figure 17-3.  Which of the following statements is true?

A) Panel B correctly describes a situation in which the income effect dominates the substitution effect at low wages (segment i) and again at very high wages (segment iii).

B) Panel B incorrectly describes a situation in which the income effect dominates the substitution effect at low wages (segment i) and a situation in which the substitution effect dominates the income effect at very high wages (segment iii).

C) Panel B incorrectly describes a situation in which the income effect dominates the substitution effect at low wages (segment i).

D) Panel B incorrectly describes a situation in which the income effect dominates the substitution effect at very high wages (segment iii)

 

 

14) Refer to Figure 17-3.  Panel D is appropriate when used to represent

A) the quantity of labor demanded by an input price taker.

B) the labor supply curve facing an input price taker.

C) the quantity of labor supplied by someone working a fixed number of hours.

D) the highly-skilled labor market supply curve.

 

 

15) Refer to Figure 17-3.  In Panel A, at low wages (segment i),

A) the substitution effect outweighs the income effect.

B) the income effect outweighs the substitution effect.

C) the substitution effect offsets the income effect.

D) labor suppliers demand more leisure as wages increase.

 

16) Refer to Figure 17-3.  In Panel A, at high wages (segment iii),

A) the price of leisure is rising relative to the price of labor.

B) the price of leisure is falling relative to the price of labor.

C) laborers work more as wages increase.

D) labor suppliers take more leisure as wages increase.

 

 

Figure 17-4

 

 

17) Refer to Figure 17-4.  Which of the following is true if the wage rate increases from W1 to W2?

A) The income effect is larger than the substitution effect.

B) The substitution effect is larger than the income effect.

C) The income effect and the substitution effect are equal.

D) The supply curve is unit-elastic.

 

18) Refer to Figure 17-4.  Which of the following is true at W0?

A) The income effect is larger than the substitution effect.

B) The substitution effect is larger than the income effect.

C) The income effect and the substitution effect are equal.

D) The supply curve is positively sloped.

 

 

19) Refer to Figure 17-4.  Which of the following is true if the wage rate increases from W0 to W1?

A) The income effect is larger than the substitution effect.

B) The substitution effect is larger than the income effect.

C) The income effect and the substitution effect are equal.

D) The supply curve is unit-elastic.

 

 

20) Refer to Figure 17-4.  Which of the following is true at W2?

A) The income effect is larger than the substitution effect.

B) The substitution effect is larger than the income effect.

C) The income effect and the substitution effect are equal.

D) The supply curve is positively sloped.

 

21) The labor supply curve

A) shows the relationship between the wage rate and the quantity of labor supplied.

B) shows the quantity of jobs supplied at various wage rates.

C) is unit-elastic.

D) is U-shaped.

 

 

 

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