Reference no: EM13317923

In comparing two otherwise identical industries X and Y, an economist finds that labor demand is more elastic in industry X. Which of the following would support this finding? 

A) Substitute resources have a less elastic supply in X than in Y

B) Labor costs as a percentage of total costs are relatively lower in X than in Y

C) Product demand elasticity is higher in X than in Y

D) Capital and labor are less easily substituted for one another in X than in Y 

All else equal, rising real wages will: 

A) have no impact on average weekly work hours

B) decrease average weekly work hours if the income effect exceeds the substitution effect

C) decrease average weekly work hours if the substitution effect exceeds the income effect

D) increase average weekly work hours if the income effect exceeds the substitution effect 

The slope of an indifference curve at any point reflects the:

A) substitution effect

B) rate at which a person is willing to substitute leisure for income

C) income effect

D) wage rate

Shanita is required by her employer to work a standard eight-hour workday. Suppose her marginal rate of substitution of leisure for income is less than the wage rate at this level of work effort. We can conclude that Shanita will: 

A) feel overemployed

B) prefer to work part-time, if such a job is available at the same wage rate

C) probably have a higher than average absenteeism rate

D) feel underemployed 

Attachment:- 479_1_Test.doc