48 The income of Alex Rodriguez New York Yankees star baseb

____   48.   The income of Alex Rodriguez (New York Yankees star baseball player) above the minimum payment needed to acquire the type of service he performs is

a.

pure profit.

b.

economic rent.

c.

marginal rent.

d.

competitive rent.

____   52.   A decision to supply labor or not to supply it is also a decision to

a.

earn the highest possible wage.

b.

demand or forgo a certain amount of leisure.

c.

be as productive as possible.

d.

join the union.

____   53.   The income effect of a wage increase is expected to increase

a.

supply of labor.

b.

supply of goods and services.

c.

demand for leisure.

d.

demand for labor.

____   54.   The substitution effect of a wage increase

a.

probably leads most workers to want to work more.

b.

certainly leads all workers to want to work more.

c.

probably leads most workers to want to work less.

d.

certainly leads most firms to want to employ more workers.

____   55.   The shortened work week coupled with rising hourly wages in the U.S. economy shows that

a.

the income effect has been dominant.

b.

the substitution effect does not exist at all.

c.

the U.S. worker is no longer productive.

d.

workers have become increasingly lazy.

____   56.   The labor supply curve starts to bend backward at the point where

a.

the total utility of leisure exceeds the total disutility of labor.

b.

the marginal utility of additional income becomes zero.

c.

the income effect comes to dominate the substitution effect.

d.

the substitution effect comes to dominate the income effect.

a.	pure profit.
b.	economic rent.
c.	marginal rent.
d.	competitive rent.

Solution

48. d. Competitive rent

52. b. Demand or forgo a certain amount of leisure.

53. d. Demand for labor.

54. a. Probably leads most workers to want to work more.

55. a. The income effect has been dominant.

56. c. The income effect comes to dominate the substitution effect.