The _____ Effect on Labor Supply Occurs When Workers Supply

question 19

Multiple Choice

The _____ effect on labor supply occurs when workers supply less labor at higher wages because the additional income increases the demand for leisure.

• A) income
• B) substitution
• C) complementary
• D) elasticity

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Definitions:

Break-even Analysis

A calculation that determines when a business or project will be able to cover all its expenses and begin to make a profit.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain scale, such as rent, salaries, and insurance.

Variable Costs

are expenses that change in proportion to the activity of a business, such as sales volumes, including costs of goods sold and direct labor costs.

Selling Price

The actual price at which a product or service is sold to customers.