The effort curve is s-shaped because at low wages, workers may not be motivated to increase effort significantly, while at high wages, they may already be working at maximum effort. At intermediate wages, a small increase in real wage can lead to a more noticeable increase in effort.

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The Effort Curve Is

Question 18

Multiple Choice

The effort curve is

A) horizontal,because work effort is independent of the real wage.
B) negatively sloped,because of diminishing marginal returns to labor.
C) positively sloped,because of the law of increasing cost.
D) s-shaped,because a small increase in the real wage will increase work effort more at an intermediate wage than at a low wage or at a high wage.

Correct Answer: