At Low Wages, the Labour Supply Curve for Most People

question 39

Multiple Choice

At low wages, the labour supply curve for most people slopes upward because

• A)the supply of labour is perfectly inelastic at low wages.
• B)as wages increase, the opportunity cost of leisure increases.
• C)as wages increase, income also increases unless hours worked decrease.
• D)the demand for labour is perfectly elastic at low wages.

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Definitions:

Acid-test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick or liquid assets.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.

Liabilities

Financial obligations or debts owed by a business to others, which must be paid back.

Merchandise Inventory

Merchandise inventory includes goods that a company intends to sell in the ordinary course of business, calculated at the cost of acquiring the goods.