In Order for There to Be a Backward-Bending Supply of Labor

question 36

Multiple Choice

In order for there to be a backward-bending supply of labor curve, it must be the case that

• A) at low wage rates, the income effect of a wage increase exceeds the substitution effect, but at high wage rates the substitution effect of a wage increase exceeds the income effect.
• B) at low wage rates, the substitution effect of a wage increase exceeds the income effect, but at high wage rates the income effect of a wage increase exceeds the substitution effect.
• C) the income effect of a wage increase exceeds the substitution effect at all wage rates.
• D) the substitution effect of a wage increase exceeds the income effect at all wage rates.

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Definitions:

Erg

A unit of energy in the centimeter-gram-second (CGS) system, equivalent to the work done by a force of one dyne exerted for a distance of one centimeter.

Basic Drive

Fundamental motivational forces that drive behavior, such as hunger, thirst, sex, and avoidance of pain.

Personality Development

The growth and change in an individual’s character and behavioral traits over their lifespan.

Cattell

Raymond Cattell was a psychologist known for his research on personality theory and his development of the 16 Personality Factor (16PF) questionnaire.