If we observe a positively sloped labor supply curve, we can conclude that
A. it violates the Law of Supply.
B. the substitution effect is larger than the income effect.
C. the substitution effect is smaller than the income effect.
D. the market wage rises as more workers are hired.
E. the demand for labor exceeds the supply of labor.
Labor is a factor of production involving an effort by human beings. There are several labor categories in an entity, including unskilled and professional labor. Employees offer labor to an entity in exchange for a reward, usually a wage.
Answer and Explanation: 1
- The correct answer is B. the substitution effect is larger than the income effect.
If we observe a positively sloped labor supply curve, we can...
See full answer below.
Become a member and unlock all Study Answers
Start today. Try it nowCreate an account
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
fromChapter 7 / Lesson 4
Learn about the labor supply and demand curves in economics. Explore the labor supply and demand curve shifts, and study the factors that impact both curves.