Which of the Following Helps to Explain Why the Supply

question 262

Multiple Choice

Which of the following helps to explain why the supply curve of labor is upward sloping?

• A)The supply curve of labor is a derived supply curve; since the output supply curve is upward-sloping so is the labor supply curve.
• B)As the wage rate rises, the income effect causes the quantity of labor supplied to increase.
• C)The substitution effect of a price change makes a good more expensive relative to other goods.
• D)As the wage rate rises, the opportunity cost of leisure rises.

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Definitions:

Marginal Product

The additional output generated by employing one more unit of a particular input, keeping other inputs constant.

Number of Workers

The total count of individuals employed within a firm, an industry, or the economy to perform various tasks and services.

Labor

It refers to the effort, skills, or work performed by workers for wages.

Maximum Total Output

The highest quantity of production that a company can achieve with its current resources and technology.