The figure below pertains to questions 2.1, 2.2, and 2.3.
1.
Award: 10.00 points
2.
Award: 10.00 points
Given a wage increase from W 0 to W 1 , the distance between L' and L 1 represents:
The substitution effect
The income effect
The combined effect of both the substitution effect and the income effect
The equilibrium choice for hours worked
The equilibrium choice for leisure
References
Multiple Choice Difficulty: Medium Learning Objective: 02-04 Explain, using
diagrams, how an increase in the wage
rate leads to offsetting income and
substitution effects, and how this yields
an ambiguous effect of wage changes on
labour supply.
Given a wage increase from W 0 to W 1 , the distance between L' and L 0 represents:
The substitution effect
The income effect
The combined effect of both the substitution effect and the income effect
The equilibrium choice for hours worked
The equilibrium choice for leisure
References
Multiple Choice Difficulty: Medium Learning Objective: 02-04 Explain, using
diagrams, how an increase in the wage
rate leads to offsetting income and
substitution effects, and how this yields
an ambiguous effect of wage changes on
labour supply.
3.
Award: 10.00 points
4.
Award: 10.00 points
Given a wage increase from W 0 to W 1 , the distance between I 1 and I 0 represents:
The substitution effect
The income effect
The combined effect of both the substitution effect and the income effect
The equilibrium choice for hours worked
The equilibrium choice for leisure
References
Multiple Choice Difficulty: Medium Learning Objective: 02-04 Explain, using
diagrams, how an increase in the wage
rate leads to offsetting income and
substitution effects, and how this yields
an ambiguous effect of wage changes on
labour supply.
Empirical literature on labour supply patterns for married women tends to find all of the following,
except:
Labour market participation rate for married women was highest in the 35-44 age group.
Women with children have lower rates of labour force participation.
The higher the education level, the higher the labour force participation rate.
The strong negative relationship between the husband's income and the labour force
participation rate for married women.
Participation rate for all married women is around 75 percent.
References
Multiple Choice Difficulty: Medium Learning Objective: 02-05 Interpret the
economic and other factors affecting a
married woman's decision to work, and
show how this decision can be captured
within the labour supply model.
5.
Award: 10.00 points
6.
Award: 10.00 points
Which of the following statements concerning the elasticity of labour supply is true?
The total wage elasticity of supply tends to be positive and of low magnitude.
The income elasticity of supply tends to be positive and of low magnitude
The compensated elasticity of supply is close to zero
Overall workers tend to be highly responsive to wage changes
None of these above statements are true
References
Multiple Choice Difficulty: Medium Learning Objective: 02-05 Interpret the
economic and other factors affecting a
married woman's decision to work, and
show how this decision can be captured
within the labour supply model.
Which of the following statements concerning the elasticity of labour supply is false?
The overall labour supply for both sexes is likely to be backward bending.
It is generally higher for women than for men.
The compensated elasticity (reflecting the substitution effect) tends to be higher in
magnitude than the uncompensated, gross elasticity.
The overall labour supply for both sexes is likely to be upward sloping
The elasticity of labour supply with respect to income is negative.
References
Multiple Choice Difficulty: Medium Learning Objective: 02-05 Interpret the
economic and other factors affecting a
married woman's decision to work, and
show how this decision can be captured
within the labour supply model.
7.
Award: 10.00 points
Which of the following statements is false?
In periods of high unemployment, discouraged workers tend to withdraw from the labour
force.
In periods of low unemployment, discouraged workers tend to re-enter the labour force.
1.
Award: 10.00 points
2.
Award: 10.00 points
Given a wage increase from W 0 to W 1 , the distance between L' and L 1 represents:
The substitution effect
The income effect
The combined effect of both the substitution effect and the income effect
The equilibrium choice for hours worked
The equilibrium choice for leisure
References
Multiple Choice Difficulty: Medium Learning Objective: 02-04 Explain, using
diagrams, how an increase in the wage
rate leads to offsetting income and
substitution effects, and how this yields
an ambiguous effect of wage changes on
labour supply.
Given a wage increase from W 0 to W 1 , the distance between L' and L 0 represents:
The substitution effect
The income effect
The combined effect of both the substitution effect and the income effect
The equilibrium choice for hours worked
The equilibrium choice for leisure
References
Multiple Choice Difficulty: Medium Learning Objective: 02-04 Explain, using
diagrams, how an increase in the wage
rate leads to offsetting income and
substitution effects, and how this yields
an ambiguous effect of wage changes on
labour supply.
3.
Award: 10.00 points
4.
Award: 10.00 points
Given a wage increase from W 0 to W 1 , the distance between I 1 and I 0 represents:
The substitution effect
The income effect
The combined effect of both the substitution effect and the income effect
The equilibrium choice for hours worked
The equilibrium choice for leisure
References
Multiple Choice Difficulty: Medium Learning Objective: 02-04 Explain, using
diagrams, how an increase in the wage
rate leads to offsetting income and
substitution effects, and how this yields
an ambiguous effect of wage changes on
labour supply.
Empirical literature on labour supply patterns for married women tends to find all of the following,
except:
Labour market participation rate for married women was highest in the 35-44 age group.
Women with children have lower rates of labour force participation.
The higher the education level, the higher the labour force participation rate.
The strong negative relationship between the husband's income and the labour force
participation rate for married women.
Participation rate for all married women is around 75 percent.
References
Multiple Choice Difficulty: Medium Learning Objective: 02-05 Interpret the
economic and other factors affecting a
married woman's decision to work, and
show how this decision can be captured
within the labour supply model.
5.
Award: 10.00 points
6.
Award: 10.00 points
Which of the following statements concerning the elasticity of labour supply is true?
The total wage elasticity of supply tends to be positive and of low magnitude.
The income elasticity of supply tends to be positive and of low magnitude
The compensated elasticity of supply is close to zero
Overall workers tend to be highly responsive to wage changes
None of these above statements are true
References
Multiple Choice Difficulty: Medium Learning Objective: 02-05 Interpret the
economic and other factors affecting a
married woman's decision to work, and
show how this decision can be captured
within the labour supply model.
Which of the following statements concerning the elasticity of labour supply is false?
The overall labour supply for both sexes is likely to be backward bending.
It is generally higher for women than for men.
The compensated elasticity (reflecting the substitution effect) tends to be higher in
magnitude than the uncompensated, gross elasticity.
The overall labour supply for both sexes is likely to be upward sloping
The elasticity of labour supply with respect to income is negative.
References
Multiple Choice Difficulty: Medium Learning Objective: 02-05 Interpret the
economic and other factors affecting a
married woman's decision to work, and
show how this decision can be captured
within the labour supply model.
7.
Award: 10.00 points
Which of the following statements is false?
In periods of high unemployment, discouraged workers tend to withdraw from the labour
force.
In periods of low unemployment, discouraged workers tend to re-enter the labour force.