Lisa Works 46 Hours a Week at $10 an Hour

question 201

Multiple Choice

Lisa works 46 hours a week at $10 an hour.If her wage increases to $16.50:

• A)the substitution effect implies that she will work less.
• B)if leisure is a normal good,the income effect implies that she will work less.
• C)if leisure is a normal good,the income effect will reinforce the substitution effect and she will work less.
• D)Lisa's marginal product of labor has decreased.

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Definitions:

Marginal Cost Curve

A graphical representation showing how the marginal cost of production varies with the quantity of output produced.

Demand Curve

A visual depiction that illustrates the correlation between a product's price and the amount consumers are willing to buy.

Total Cost Curve

A graphical representation showing how the total cost of producing a good changes as the quantity produced changes.

Marginal Revenue Curve

A graph that shows the change in total revenue for each unit sold, illustrating how marginal revenue changes as output changes.