The Typical Labour Supply Curve Is Upward Sloping, but It

question 121

Multiple Choice

The typical labour supply curve is upward sloping, but it is possible for the curve to be backward bending-negatively sloped-at very high wage levels.Which of the following would cause a backward-bending supply curve?

• A)This would occur when the income effect from an increase in the wage becomes larger than the substitution effect.
• B)This would occur when the substitution effect from an increase in the wage becomes larger than the income effect.
• C)This would occur if leisure were an inferior good.
• D)This would occur when a large number of workers choose leisure rather than employment at low wages; only a very large increase in the wage will lead these workers to prefer employment to leisure.

Demonstrate knowledge of decision-making processes and strategies within groups.

Understand barriers to effective problem-solving and decision-making in a group context.

Understand the importance of objective analysis in group decision-making.

Gain knowledge on various approaches to decision making within task groups, including the advantages and disadvantages of each.

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Definitions:

Aggregate Demand

The total demand for all goods and services in an economy at a given overall price level and within a specified period.

National Income

The total income earned by a nation's people and businesses, including wages, rent, interest, and profits.

Discretionary Fiscal Policy

involves deliberate changes by government in taxation and spending policies intended to stabilize or stimulate the economy.

Legislative Changes

Modifications or amendments made to existing laws or the introduction of new laws by a governing body or legislature.