1(i)If material consumption and leisure were complementary goods (no substitution effect) and leisure is a normal good (positive income effect) then the labour supply curve should be:

A Positively sloped

B Negatively sloped

C Vertical

D Cant say

(ii)If the estimated wage elasticity of labour demand across the economy was -0.7, the lowering wages would result in

A Higher labour demand and greater aggregate levels of wage earnings

B Higher labour demand and lower aggregate levels of wage earnings

C Lower labour demand and greater aggregate levels of wage earnings

D Lower labour demand and lower aggregate levels of wage earnings

(iii)According to neo-classical consumer theory, an indirect tax that increases the price of a good is inefficient because:

A It makes consumers worse off

B It is unfair

C It causes some consumers to leave the market

D Its lack of transparency in terms of its real income effect