If an individual's labor supply curve is backward bending, then
A) the income effect associated with a higher wage is greater than the substitution effect.
B) the substitution effect associated with a higher wage is greater than the income effect.
C) the substitution effect associated with a higher wage encourages more leisure.
D) A and C
E) B and C
A
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Which of the following is most likely to happen if aggregate consumption in an economy falls steeply?
A) Asset prices rise. B) Mortgage defaults fall. C) Labor supply falls. D) Firm bankruptcies rise.
Using the economic way of thinking, complete the following sentence: "One person's profit is
A) a sign of sinful activity." B) the result of uncertainty." C) only a matter of luck and chance." D) another person's loss."
The law of demand states that there is
A) an inverse relationship between income and quantity demanded, ceteris paribus. B) a direct relationship between income and quantity demanded, ceteris paribus. C) no relationship between taste and quantity demanded, ceteris paribus. D) an inverse relationship between price and quantity demanded, ceteris paribus.
Issuing money to finance budget deficits:
A. increases the resources consumed by both the government and the private sector. B. does not increase the resources consumed by either the government or the private sector. C. increases the resources consumed by the government and thereby leaves fewer resources for the private sector. D. increases the resources consumed by the government but does not change the resources consumed by the private sector.