The Substitution Effect on Labour Supply Refers to the Degree

question 72

Multiple Choice

The substitution effect on labour supply refers to the degree to which

• A)the firm can substitute other factors of production for labour.
• B)buyers can substitute other products for the products that are made by organized labour.
• C)labour is willing to substitute nonlabour income for wages.
• D)labour prefers to substitute nonmonetary payments for money wages.
• E)labour is willing to substitute work for leisure.

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Definitions:

Salvage Value

The estimated resale value of an asset at the end of its useful life.

Annual Retirement Income

The total amount of income a person receives in one year after retiring from work, which can come from pensions, savings, investments, or other sources.

After Tax

Refers to the amount of money or income that remains after all federal, state, and withholding taxes have been deducted.