Explain the answers

1. Why do indifference curves slope downward? \"2.)When less of one good is consumed, additional of the other is required to keep utility from falling. / b. When wages fall, conswmers work more. c. Firms need to increase the wage rate to attract additional labor. d. Leisure and consumption are complements. 2. A payroll tax: a. increases the demand for workers. ) b. is borne entirely by workers if the supply of labor is perfectly inelastic. Yot o r'f] reduces the quantity of workers hired unless the supply of labor is perfectly elastic. . generally leads to wage increases enjoyed by workers. 3. Which of the following circumstances will increase the likelihood of an individual being a non- participant in the labor market? ' a. high earnings capacity in the labor market. b. the absence of non-wage income. c. a potential market wage that exceeds the individual's reservation wage. ~esavailability of substantial non-wage income. 1. A person who receives time-and-a-half overtime for working more than 8 hours per day will have a which is beyond 8 hours of labor. = a. budget constraint; steeper . b. indifference curve; steeper G)budget constraint; flatter A 'adifference curve; flatter 5. Through the substitution effect, a decrease in the wage rate will cause in the quantity of leisure desired. a. an increase decrease i ":*./lw change d. theer 1s not enough information to answer this question -y 6. If Aii~ ', wvage increases from $16.00 per hour to $16.50 per hour, then ?":"'- she may want to work more, fewer, or the same number of hours as before her raise. %. she will want to work the same number of hours as before her raise. . she will want to work more hours than before her raise. 'l. she will want to work fewer hours than before her raise. 7. What is an example of the scale effect? a. Workers choose to provide more hours of labor when the wage rate decreases. . b. Hiring more labor as long as the marginal product of labor is positive. A + = The firm expands output when production costs fall. f d. The firm expands output when production costs increase. e. The firm hires more labor when the wage falls because labor has become relatively cheaper compared to the price of other factors of production. 8. When the tax rate on wages falls (so that the take-home wage or effective wage increases), the budget lire rotates out along the consumption axis. h