Explain the concept of a backward-bending labor supply curve.
What will be an ideal response?
As wage rates climb, the substitution effect of wages may be more than offset by the income effect of wages. A higher wage rate may allow a person to reduce hours worked without losing income.
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The key objective of purchases by the Federal Reserve of over $1 trillion worth of debt issued by private firms was ________
A) to avoid the bankruptcy of the issuing firms B) to manage expectations C) to prevent such firms from being acquired by foreign companies D) to stimulate spending by firms and households
The United States and Mexico recently negotiated a trade agreement that eliminated many of the restrictions on trade between the two countries
a. Using the tools of microeconomics, describe how such an agreement will benefit both the USA and Mexico. b. Will everyone benefit from such an agreement? who stands to lose from such an agreement. Why?
If the CEO of a large corporation uses the corporate jet to fly friends to the Super Bowl at company expense, this is most clearly an example of
a. the duality problem. b. the violation of ceteris paribus conditions. c. a negative externality. d. the principal-agent problem.
The rate of interest banks charge each other for lending reserves is the:
A. Federal funds rate. B. Discount rate. C. Money multiplier. D. Excess reserve rate.