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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Definitions:

Enriched Environments

Settings that provide increased sensory, intellectual, and social stimulation, which can enhance learning and development.

Visual Cortex

The part of the cerebral cortex that processes visual information, located in the occipital lobe of the brain.

Myelination

The development of a myelin sheath around the nerves, which facilitates faster transmission of electrical signals in the nervous system.

Cognitive Development

The process by which individuals perceive, think, and gain understanding of their world through genetic and learned factors.