If Workers Respond to an Increase in the Opportunity Cost

question 103

Multiple Choice

If workers respond to an increase in the opportunity cost of leisure by taking more leisure,then their labor supply curve is

• A)upward sloping.
• B)downward sloping.
• C)horizontal.
• D)vertical.

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Definitions:

Elasticity Coefficient

A numerical measure of the responsiveness of the quantity demanded or supplied of a good to one of its determinants, like price or income.

Marginal Revenue Curve

A graphical representation showing how much additional revenue a firm will make from selling one more unit of a product or service.

Relatively Elastic

Refers to a scenario in which the demand or supply for a product or service greatly alters due to variations in its price.

Marginal Revenue

The extra revenue produced by the sale of an additional unit of a product or service.