In Response to an Increase in Total Factor Productivity

question 20

Multiple Choice

In response to an increase in total factor productivity

• A)both the substitution effect and the income effect suggest that hours worked should increase.
• B)the substitution effect suggests that hours worked should decrease, while the income effect suggests that hours worked should increase.
• C)the substitution effect suggests that hours worked should increase, while the income effect suggests that hours worked should decrease.
• D)the net effect is a reduction in the welfare of the representative consumer.
• E)both the substitution effect and the income effect suggest that hours worked should decrease.

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Definitions:

Evolutionary Theory

A scientific explanation regarding the biological changes and speciation events that occur over generations, based on natural selection.

Short-term

Referring to a limited time period, often used in contrast with long-term to describe memory, planning, goals, or investments.

Sexual Relationships

Intimate connections between individuals that often include physical and emotional intimacy, as well as sexual activity.

Common Ancestor

An ancestral form or species from which two or more descendant species evolved.