An Increase in Wealth Will Cause the Labor Supply Curve

question 287

Multiple Choice

An increase in wealth will cause the labor supply curve to:

• A)shift leftward if leisure is a normal good.
• B)slope downward if the substitution effect dominates the income effect.
• C)slope upward only if leisure is an inferior good.
• D)bend backward if the income effect outweighs the substitution effect of a change in wealth and if leisure is a normal good.

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Definitions:

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involves creating detailed and layered portrayals or models of ideas, objects, or systems.