The Labor Supply Curve May Have a Backward Bending Portion

question 262

Multiple Choice

The labor supply curve may have a backward bending portion because at higher wages the

• A) income effect is smaller than the substitution effect.
• B) income effect is larger than the substitution effect.
• C) income effect is negative.
• D) Any of the above could result in a backward-bending supply curve.

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Definitions:

Positive and Negative Charges

Fundamental aspects of atoms and molecules, with positive charges carried by protons and negative charges by electrons.

Oxidizing Agent

A chemical substance that can accept electrons from another substance, thereby oxidizing the latter in a redox chemical reaction.

Carbon Monoxide

A colorless, odorless, and tasteless gas that is toxic to humans and animals when encountered in higher concentrations.

Oxygen

A chemical element (O) essential for most forms of life on Earth, critical for cellular respiration in organisms.