The Labor Supply Curve May Have a Backward Bending Portion

question 262

Multiple Choice

The labor supply curve may have a backward bending portion because at higher wages the

• A) income effect is smaller than the substitution effect.
• B) income effect is larger than the substitution effect.
• C) income effect is negative.
• D) Any of the above could result in a backward-bending supply curve.

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Definitions:

Freud

Sigmund Freud, an Austrian neurologist and the founding father of psychoanalysis, a method for treating psychopathology through dialogue.

Oedipus Complex

A Freudian theory describing a child's feelings of desire for their opposite-sex parent and jealousy towards the same-sex parent.

Latency Period

A phase in psychosexual development, occurring roughly between the ages of six and puberty, when sexual urges are repressed or dormant.

Freud's Theory

A set of psychoanalytic theories developed by Sigmund Freud, emphasizing unconscious conflict, stages of sexual development, and the structure of personality (id, ego, and superego).