For Many Jobs, as Wages Increase, the Quantity Supplied of Labor

question 370

Multiple Choice

For many jobs, as wages increase, the quantity supplied of labor increases. This set of facts is evidence that the

• A) substitution effect is larger than the income effect and the supply of labor curve is upward sloping.
• B) income effect is larger than the substitution effect and the supply of labor curve is upward sloping.
• C) substitution effect is larger than the income effect and the supply of labor curve is backward bending.
• D) income effect is larger than the substitution effect and the supply of labor curve is backward bending.

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Definitions:

Finished Goods Inventory

The stock of completed products that are ready to be sold.