The survey on labour supply by Killinsworth found that
A) labour supply rises in response to a permanent increase in the real wage, but falls in response to a temporary increase in the real wage.
B) labour supply rises in response to a temporary increase in the real wage, but falls in response to a permanent increase in the real wage.
C) labour supply rises in response to both a temporary and a permanent increase in the real wage.
D) labour supply falls in response to both a temporary and a permanent increase in the real wage.

Question

Quizplus · Accepted Answer

Killinsworth's survey found that labour supply responds differently to temporary and permanent increases in real wage. Specifically, labour supply rises in response to a temporary increase in real wage, but falls in response to a permanent increase in real wage. Therefore, option B is the correct choice.

The Survey on Labour Supply by Killinsworth Found That