Which Statement Is True

question 6

Multiple Choice

Which statement is true?

• A)Most people would put in a maximum workweek of 48 hours no matter what the pay.
• B)As one's income rises,eventually the income effect outweighs the substitution effect.
• C)As one's income rises,eventually the substitution effect outweighs the income effect.
• D)The "backward bending" supply curve is not really backward bending.

---

Definitions:

Economic Profits

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the profitability of a business venture beyond basic operating costs.

Unimpeded Entry

A market condition where there are no barriers for new firms to enter and compete in the industry.

Purely Competitive Firm

A company that operates in a market where there are many buyers and sellers, none of which can influence market prices significantly.

Long Run

A period of time during which all factors of production and costs are variable, in contrast to the short run where some are fixed.