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:

Strip Bonds

Fixed-income securities that are derived from separating the principal and interest payments of a bond, which are then sold as individual zero-coupon bonds.

RRSP

The Registered Retirement Savings Plan is a financial tool for Canadian workers and self-employed persons, facilitating savings and investments for retirement.

Yield

The return in terms of income from an investment, like dividends or interest earned by possessing a specific security.

Compound-interest

Interest computed on both the original sum invested or loaned, as well as on the interest that has been added to this principal amount over earlier periods.