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:

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Figures of speech in which a word or phrase is applied to an object or action to which it is not literally applicable, often providing a symbolic comparison.

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The process by which individuals perceive, think, and gain understanding of their world through the interaction of genetic and learned factors.

Middle Childhood

A developmental stage that generally includes children from 6 to 12 years old, focusing on the growth of cognitive, social, and emotional skills.

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An educational approach where children are instructed at home by parents or tutors, rather than in traditional public or private school settings.