As the Wage Rate Rises,a Household Will Have a Backward-Bending

question 73

Multiple Choice

As the wage rate rises,a household will have a backward-bending supply of labour curve if

• A)the income effect reinforces the substitution effect.
• B)the wage rate rises above the reservation wage.
• C)the substitution effect dominates the income effect.
• D)the income effect dominates the substitution effect.
• E)leisure is an inferior good.

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Definitions:

Absolute Threshold

The minimum intensity of a stimulus that one can detect 50% of the time, establishing the boundary between noticeable and unnoticeable stimuli.

Difference Threshold

The smallest change in stimulation that is detectable by a person at least half the time, referred to as the just noticeable difference (JND).

Separation Threshold

The minimum distance or difference in stimuli required to distinguish between two separate entities or experiences.

Difference Threshold

The minimal detectable difference between two stimuli required for detection that they are not the same, also known as the just noticeable difference (JND).