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.

---

Definitions:

Behavioral Problems

Refers to actions or behaviors that are disruptive or inappropriate compared to the expected norms for a person's age and culture.

Pays Attention

Refers to the act of focusing cognitive resources on a specific stimulus or task, often discussed in the context of learning and perception.

Receptive Language Disorder

A condition characterized by difficulties in understanding or processing language that is heard or read.

Developmental Coordination Disorder

Neurodevelopmental disorder characterized by marked impairment in the development and performance of coordinated motor activities.