The Labour Supply Curve May Eventually Become "Backward Bending" at High

question 24

Multiple Choice

The labour supply curve may eventually become "backward bending" at high wages because

• A)the income effect of the higher wage is dominated by the substitution effect.
• B)the income effect of the higher wage dominates the substitution effect of the higher wage.
• C)firms will demand added productivity from the workers as the wage reaches very high levels.
• D)firms will demand longer hours in trade for the higher wages.
• E)people get tired of working so many hours and refuse to increase their labour supply.

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Definitions:

Erie Canal

A historic canal in New York, opened in 1825, playing a crucial role in the westward expansion and economic growth of the United States by linking the Great Lakes with the Atlantic Ocean.

Global Perception

The way a particular issue, entity, or concept is viewed and understood by people around the world, influenced by cultural, social, and individual factors.

Mill Girls

Young women who worked in the textile mills during the Industrial Revolution, particularly noted in the 19th century in the United States, often to support their families under challenging conditions.

Labor Force

The total number of people employed or actively seeking employment in a country or region.