Question

QUESTION 11

1. The household theory of labor participation predicts in theory that an increase in wage will reduce leisure and nonmarket activities and increase hours of work.

   True

   False

1.5 points   

QUESTION 12

1. All elements of Social Security programs are quasi - fixed.

   True

   False

1.5 points   

QUESTION 13

1. At the optimum, the indifference curve is tangent to the budget constraint.

   True

   False

1.5 points   

QUESTION 14

1. To recover its trainig costs, the firm must pay the workers less than their marginal product at the firm.

   True

   False

1.5 points   

QUESTION 15

1. If the indifference curve is stepper than the budget constraint, then hours of leisure is 0.

   True

   False

Answer 1

Question 11) True Explanation The increase in the wage reduces the non-market activities as the market activities will pay more than non market activities.

Question 12) True Explanation- Yes the all elements of social security programs are quasi fixed .

Question 13) True Explanation - The indifference curve becomes tangent to the  budget constraint at the optimum scenario.

Question 14) True Explanation - When firm pays less than marginal product of the firm to workers then they can recover the training costs.

Question 15) True Explanation - The leisure is zero when the in difference curve becomes steeper than the budget constraint.