WRITE THE NUMBER OF EACH QUESTION AND YOUR ANSWER NEXT TO IT For (1) to (6) writ
ID: 1106723 • Letter: W
Question
WRITE THE NUMBER OF EACH QUESTION AND YOUR ANSWER NEXT TO IT For (1) to (6) write TRUE or FALSE for each statement: 1) A worker's labor supply curve will have a NEGATIVE slope if the SUBSTITUTION EFFECT is larger than the income effect. 2) One reason human capital investment is usually made when people are young is because the PSYCHIC COSTS are often LARGER for the young than the old. 3) For male workers in the U.S., overall, the INCOME effect of rising wages has caused them to retire at a younger age than workers 50 years ago. . 4) The opportunity cost of home produced goods and services is LARGER today for the average woman than it was in the past.. 5) The average workweek has gotten shorter over time in the U.S. mainly because the average wage is higher 6) The individual worker's labor supply curve can never have a sitive slope 7) The INCOME EFFECT is caused by a change in the of the worker 8) The SUBSTITUTION EFFECT moves individual labor supply in the direction as the change in the wageExplanation / Answer
1. False.
Negative income effect needs to outweigh the positive substitution effect to have a backward bending labour supply curve.
2. False.
As age increases, less number of years are available for work, so the higher psychic cost would not be compensated by the future return.
3. True.
People retire at a younger age as investing in human capital at a young age give them lot of opportunities to earn a higher return and outweighing income effect make them satisfied.
4. True.
Opportunity cost is the cost of the next best alternative. The alternative to home produced goods and services is working outside home, which is higher.
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