Why Might an Individual's Labor Supply Curve Bend Backwards

question 107

Multiple Choice

Why might an individual's labor supply curve bend backwards?

• A) As wages rise above a threshold level, the individual will decide to work harder.
• B) As wages rise above a threshold level, the individual may opt for more leisure time.
• C) As wages rise above a threshold level, firms limit the amount of hours that a worker can work.
• D) When wages rise, firms hire fewer workers.

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Definitions:

Accounts Payable

Money owed by a company to its creditors or suppliers for goods and services that have been received but not yet paid for.

Debit Entry

An accounting entry that increases an asset or expense account, or decreases a liability, equity, or revenue account.

Credit Entry

An accounting entry that increases a liability or equity account or decreases an asset or expense account.

Service Revenue

Income earned by a company for services provided to customers or clients.