If Chad's Labor-Supply Curve Is Upward-Sloping, Then, for Chad

question 334

Multiple Choice

If Chad's labor-supply curve is upward-sloping, then, for Chad,

• A)an increase in the wage creates an income effect that is greater than the substitution effect.
• B)an increase in the wage creates a substitution effect that is greater than the income effect.
• C)leisure and consumption are perfect substitutes.
• D)leisure and consumption are perfect complements.

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Definitions:

Preferred Stock

A type of stock that gives holders priority over common stockholders in terms of dividend payments and claims on assets in the event of liquidation.

Stock Dividend

A form of dividend payment made by a company to its shareholders in the form of additional shares, rather than cash.

Paid-In Capital

The capital received by a company from investors in exchange for stock, representing funds raised beyond the par value of the shares issued.

Paid-In Capital in Excess of Par

The amount of capital received from investors for stock, in excess of the par value of the shares.