The Labor Supply Curve Starts to Bend Backward at the Point

question 141

Multiple Choice

The labor supply curve starts to bend backward at the point where

• A)the total utility of leisure exceeds the total disutility of labor.
• B)the marginal utility of additional income becomes zero.
• C)the income effect comes to dominate the substitution effect.
• D)the substitution effect comes to dominate the income effect.

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Definitions:

Interest Revenue

Income earned from the lending of money or from investments in interest-bearing accounts.

Account Payable

An amount owed by an entity to a creditor for goods and services purchased on credit; considered a short-term liability.

Account Receivable

Funds that are owed to a company by clients or customers who have received goods or services on credit.

Total Liabilities

Represents the combined debts and obligations that a company owes to outside parties at a specific point in time.