If His Wage Rate Increases, Then a Utility Maximizing Consumer

question 5

Multiple Choice

If his wage rate increases, then a utility maximizing consumer will necessarily

• A)increase (or leave constant)his labor supply.
• B)increase (or leave constant)his labor supply if leisure is a normal good but otherwise might reduce his labor supply.
• C)increase (or leave constant)his labor supply if leisure is an inferior good but otherwise might reduce his labor supply.
• D)decrease (or leave constant)his labor supply.
• E)none of the above.

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Definitions:

Standard Deviation

A quantitative assessment of how much data points diverge from the average value in a series.

Mean Weight

The average weight calculated by summing all the weights in a dataset and dividing by the number of observations.

Confidence Interval

A confidence interval is a range of values, derived from sample statistics, that is believed, with a certain level of confidence, to contain the true value of a population parameter.

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