1. The opportunity cost of leisure : a) increases as wages get higher b) decreas

Question

1. The opportunity cost of leisure :
a) increases as wages get higher
b) decreases as wages get higher
c) remains the same as wages get higher
d) has nothing to do with wages
2. The effect that explains why workers tend to supply more hourswhen wages increase is called the :
a) income effect
b)social effect
c)substitution effect
d) work effect
3. The effect that explains why workers might supply fewer hourswhen their wages increase is called the:
a) income effect
b)leisure effect
c)substitution effect
d)work effect
4. The demand for labor is derived demand because :
a) many workers are self-employed
b) the income workers earn adds to the demand output
c) the demand for output comes from the demand for labor
d) the demand for labor comes from the demand for output
5. If the demand for legal services decreases, the demand for legalassistants will probably:
a)not be affected
b)increase
c) decrease
d) change in the manner that cannot be predicted

Explanation / Answer

aa) income effect cc)substitution effect dd) the demand for labor comes from the demand foroutput cc) decrease

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