As the Wage Rate Rises,a Household Will Have a Backward-Bending

question 73

Multiple Choice

As the wage rate rises,a household will have a backward-bending supply of labour curve if

• A)the income effect reinforces the substitution effect.
• B)the wage rate rises above the reservation wage.
• C)the substitution effect dominates the income effect.
• D)the income effect dominates the substitution effect.
• E)leisure is an inferior good.

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