The Typical Labor Supply Curve Is Upward Sloping but It

question 253

Multiple Choice

The typical labor supply curve is upward sloping but it is possible for the curve to be backward bending -negatively sloped-at very high wage levels.Which of the following would cause a backward-bending supply curve?

• A)This would occur when the income effect from an increase in the wage becomes larger than the substitution effect.
• B)This would occur when the substitution effect from an increase in the wage becomes larger than the income effect.
• C)This would occur if leisure is an inferior good.
• D)This would occur when a large number of workers choose leisure rather than employment at low wages; only a very large increase in the wage will lead these workers to prefer employment to leisure.

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Rapid movements of rock and soil down a slope due to gravity.

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Water that occupies the pore spaces and fractures in soil, sand, and rock, located beneath the Earth’s surface.

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A heavy radioactive metallic element used as fuel in nuclear reactors and as a component in nuclear weapons.

Natural Gas

Hydrocarbons that exist as gas or vapor at ordinary temperatures and pressures.