Which of the Following Statements Is Not True of Labor

question 25

Multiple Choice

Which of the following statements is not true of labor supply?

• A)Jerry's labor supply curve can bend backward if the income effect of a higher wage rate outweighs the substitution effect.
• B)Bob's labor supply curve will not bend backward if the wage rate is never so high that the income effect outweighs the substitution effect.
• C)If there is a wage rate above which the income effect is at least as great as the substitution effect, the labor supply curve will be vertical or bend backward.
• D)The labor supply curve will slope upward if the income effect dominates the substitution effect.
• E)Hayden's offer to work more hours as a result of a wage increase suggests that the substitution effect dominates the income effect.

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Definitions:

Limbic System

A complex system of nerves and networks in the brain, involved with instinct and mood control, and the processing of emotions.

Autonomic Nervous System

The part of the nervous system that controls involuntary bodily functions, such as heartbeat and digestion.

Sympathetic Nervous System

Part of the autonomic nervous system responsible for activating the body's fight-or-flight response during stressful situations.

Parasympathetic Nervous System

A division of the autonomic nervous system responsible for stimulating "rest-and-digest" or "feed and breed" activities when the body is at rest, promoting calming and a return to maintenance functions.