Author Question: Labor supply A) must necessarily increase when the real wage increases. B) increases if the ... (Read 88 times)

viki · **on:** Jun 30, 2018

Labor supply

A) must necessarily increase when the real wage increases.
B) increases if the substitution effect exceeds the income effect.
C) is increasing and then decreasing in the real wage.
D) increases when taxes increase.

Question 2

Assume that you purchased a 1,000 perpetual bond that pays a market interest rate of 5 percent. If you attempted to sell this bond today subsequent to an increased market rate of interest of 7.5 percent, then you

a. could only sell this bond at a capital loss.
b. could sell this bond at a capital gain.
c. would not be able to sell this bond.
d. could exchange your bond yielding 5 percent for a bond yielding 7.5 percent on an even exchange basis.