If Chad's Labor-Supply Curve Is Upward-Sloping, Then, for Chad

question 334

Multiple Choice

If Chad's labor-supply curve is upward-sloping, then, for Chad,

• A)an increase in the wage creates an income effect that is greater than the substitution effect.
• B)an increase in the wage creates a substitution effect that is greater than the income effect.
• C)leisure and consumption are perfect substitutes.
• D)leisure and consumption are perfect complements.

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Definitions:

Rationing Function

The process through which prices distribute scarce goods and services among individuals who demand them, effectively limiting the quantity that consumers can purchase.

Incentive Function

The aspect of economic policy or mechanism designed to motivate individuals or entities to act in a certain way by offering rewards.

Labor's Share

The portion of national income or the total output of the economy that is allocated to workers in the form of wages and salaries.

National Income

The total income earned by a country's residents and businesses, including wages, profits, and investment returns, reflecting the economic health of the nation.