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Question: 11 let l be leisure and y be income then...

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11. Let L be leisure and Y be income then the optimal work-leisure position is achieved where:
a. the MRS L,Y is equal to the wage rate
b. the difference between the MRS L,Y and the wage is greatest
c. the wage rate is greatest
d. the MRS L,Y is greatest
12. A household will tend to substitute goods for time in the production of commodities if:
a. a household member’s market wage increases
b. a household member’s market wage decreases
c. the substitution effect of a wage decrease exceeds the income effect
d. the household’s total income decreases
13. Which of the following best exemplifies the Becker income effect? An increase in the market wage leads a household to:
a. substitute time for goods in the production of commodities
b. consume fewer time-intensive commodities and more goods-intensive commodities
c. consume more commodities
d. have fewer children
14. The labor force consists of all persons age 16 years and over who are:
a. employed
b. employed or are actively seeking employment
c. employed, actively seeking employment, or have given up looking for employment
d. not institutionalized
15. Given the following data, what is the labor force participation rate?
Population 300 million
Non-institutionalized population, age 16 and over 250 million
Persons employed or seeking employment 200 million
Unemployed persons 10 million

a. 10% b. 75% c. 80% d. 84%

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