In Order for a Labor Supply Curve to Be Backward

question 214

Multiple Choice

In order for a labor supply curve to be backward bending at high wages,

• A)leisure must be an inferior good.
• B)the substitution effect of a wage increase must be greater than the income effect.
• C)workers must have an irrational response to wage increases.
• D)the income effect of a wage increase must be greater than the substitution effect.

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Definitions:

Inexpensive

Costing little money; affordable or budget-friendly.

Culturally Appropriate

Actions, behaviors, or practices that are considerate and respectful of the cultural norms and values of others.

APA Ethics Code

A set of guidelines and standards established by the American Psychological Association to ensure ethical practice in the field of psychology.

Risk of Exploitation

The possibility of taking unfair advantage of someone, especially in situations involving power imbalances.