whether and how
much to work.
Difficulty: Easy Learning Objective:
02-03 Distinguish
theoretically
between the work
choices made by
individuals and the
economic
opportunities that
they choose from.
26.
Award: 10.00 points
An increase in non-market income will have which of the following effects?
An upward shift in the income constraint
A downward shift in the income constraint
A clockwise rotation in the income constraint, making it steeper
A counter-clockwise rotation in the income constraint, making it flatter
There is no change to the income constraint.
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.
27.
Award: 10.00 points
Which of the following diagrams corresponds to a budget line that involves overtime hours with a
wage premium?
(a)
(b)
(c)
(d)
None of these above
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.
28.
Award: 10.00 points
Which of the diagrams given below corresponds to a budget constraint with some non-labour
income?
(a)
(b)
(c)
(d)
None of these above
References
Multiple Choice Learning Objective:
02-02 Illustrate
graphically how the
labour supply model
reflects the income
and leisure trade-
offs that consumers
face in deciding
whether and how
much to work.
Difficulty:
Medium
Learning Objective:
02-03 Distinguish
theoretically
between the work
choices made by
individuals and the
economic
opportunities that
they choose from.
29.
Award: 10.00 points
Which of the diagrams given below corresponds to a budget line that involves a wage increase?
(a)
(b)
(c)
(d)
None of these above
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.
30.
Award: 10.00 points
Which of the diagrams given below corresponds to a budget line that involves an increase in non-
labour income?
(a)
(b)
(c)
(d)
None of these above
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.
31.
Award: 10.00 points
32.
Award: 10.00 points
In the basic income-leisure model, what is indicated by a parallel shift of the budget line?
The substitution effect
The total effect of a price change
A change in the preferences
The income effect of either a price change or an income change
The reservation wage
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.
Our income-leisure model suggests that if a worker is moonlighting, then:
She is underemployed.
She is unemployed.
she receives an overtime premium.
She is overemployed.
There is no income effect
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.
33.
Award: 10.00 points
Our income-leisure model suggests that if a worker is working overtime, then:
she Is underemployed.
she is overemployed.
if she is paid the straight-time equivalent, she will work more hours than over-time hours.