If the Income Effect of a Wage Increase Equals the Substitution

question 95

True/False

If the income effect of a wage increase equals the substitution effect, the labour supply curve is horizontal at the equilibrium wage.

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Definitions:

Bias

A tendency, inclination, or prejudice in favor of or against one thing, person, or group compared with another, often in a way considered to be unfair.

Prejudice

Preconceived opinion or bias against someone or something, often based on stereotypes or unfounded beliefs, without proper knowledge or examination.

Personal Leaning

The individual inclination or tendency towards particular opinions, interests, or areas of knowledge.

Alfred C. Kinsey

An American biologist and sexologist known for his research on human sexuality, notably documented in his Kinsey Reports.