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- Subject
- Income Inequalityeconomics-mcqs › income-inequality
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
Explanation
When the labor supply curve bends backward, it indicates that the income effect exceeds the substitution effect. Since leisure is a normal good, as wages increase, the individual prefers more leisure time, reducing labor supply despite higher wages.
More Income Inequality MCQs
Practice related questions from the same subject.
- 1.Which of the following best describes the Benazir Benefit Income Scheme?
- 2.Which category of tax does VAT best represent?
- 3.When a tax can be transferred, what determines the actual burden of the tax?
- 4.What does tax incidence refer to?
- 5.What does a progressive income tax system imply about the tax rate for individuals with higher earnings?
- 6.What does the marginal tax rate represent?
- 7.What principle does vertical equity represent in taxation?
- 8.What does a Gini coefficient of zero indicate?
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