Asked by
Alexia Perez
on Nov 16, 2024
Verified
The labor supply curve may have a backward-bending portion if, at higher wages, the income effect is
A) smaller than the substitution effect.
B) larger than the substitution effect.
C) negative.
D) zero.
Labor Supply Curve
A graphical representation showing the relationship between the wages offered and the quantity of labor workers are willing to supply.
Backward-Bending
A term often used in labor economics to describe the supply curve of labor, which can bend backwards at higher wage levels, indicating that higher wages can lead to a decrease in labor supply.
- Assess the elements that contribute to choices about providing labor, focusing on the consequences of wage fluctuations.
- Contrast the income and substitution effects across multiple economic settings.
Verified Answer
MV
Learning Objectives
- Assess the elements that contribute to choices about providing labor, focusing on the consequences of wage fluctuations.
- Contrast the income and substitution effects across multiple economic settings.