Kimberly's wage rate is $16 an hour, Kimberly has non-labor income of $150 per day and sleeps for 7 hours a night. If the rest of Kimberly's time can be allocated between working and leisure, what is the absolute value of the slope of Kimberly's budget constraint.

Question 1 options:

A)

16

B)

9.4

C)

17

D)

150

Question 2(3 points)

Of the 500,000 people (age 16+) in a particular country, 300,000 people are in the labor force. Of these, 240,000 are employed and 60,000 are unemployed. What is the labor force participation rate?

Question 2 options:

A)

60%

B)

48%

C)

55%

D)

25%

Question 3(2 points)

The reservation wage likely increases when

Question 3 options:

A)	nonlabor income increases

B)	the price of consumption increases

C)	the price level (of consumption and wages) increases.

D)	one is a discouraged worker.

E)	the wage increases

Question 4(2 points)

The change in utility resulting from an additional dollar spent on leisure holding the amount of goods consumed constant is the

Question 4 options:

A)	Marginal Utility of consumption

B)	Total Utility of consumption

C)	Marginal Utility of Leisure

D)	Total Utility of consumption

Question 5(2 points)

Assuming consumption and leisure are both normal goods, hours worked will fall when the wage increases if

Question 5 options:

A)	the income effect dominates the substitution effect.

B)	if the income and substitution effect move in the same direction (i.e., if they are of the same sign).

C)	if the income and substitution effect move in the opposite direction (i.e., if they are of the opposite sign).

D)	the wage increase is accompanied by an increase in prices

Question 6(2 points)

The consumer prefers lower Indifference curves to higher ones

Question 6 options:

	True
	False

Question 7(2 points)

When the wage was $10 per hour, a group of workers supplied 30 hours of work per week on average. The wage then increased to $12 per hour, and the same group of workers supplied 33 hours of work per week on average. What is the elasticity of labor supply for this group of workers?

Question 7 options:

A)

0.5

B)

1.5

C)

2.0

D)

1.0

Question 8(2 points)

Who is not counted in the U.S. labor force?

Question 8 options:

	a full-time college student
	a person working at least one hour for pay per week
	a person working 15 hours a week or more, not for pay
	a 70-year-old person who supplements his Social Security payments by working eight hours each week at the minimum wage
	someone actively looking for a job

Question 9(2 points)

A welfare program; that provides a cash grant of $800 per month and imposes a negative income tax of 30% to a person who can earn $10 per hour working, could create work disincentives because the effective wage is higher than the actual wage.

Question 9 options:

	True
	False

Question 10(2 points)

An increase in nonlabor income while holding the wage rate constant

Question 10 options:

A)	shifts the budget line outward while maintaining the same slope.

B)	rotates the budget line in along the consumption axis.

C)	rotates the budget line out along the consumption axis.

D)	rotates the budget line out along the leisure axis.

E)	rotates the budget line in along the leisure axis.

Question 11(2 points)

Question 11 options:

A)	The wage rate is $4

B)	The optimal number of hours to supply is zero

C)	Non-labor income is $400

D)	All of the answers choices are correct

Question 12(2 points)

Supply curve bends backward when the

Question 12 options:

A)	income effect dominates the substitution effect

B)	there is no substitution effect

C)	the substitution effect dominates the income effect

D)	there is no income effect