A Backward-Bending Supply Curve of Labor Shows That at Relatively

question 52

Multiple Choice

A backward-bending supply curve of labor shows that at relatively high wages the:

• A) income effect dominates the substitution effect, and the supply curve has a positive slope.
• B) income effect dominates the substitution effect, and the supply curve has a negative slope.
• C) substitution effect dominates the income effect, and the supply curve has a positive slope.
• D) substitution effect dominates the income effect, and the supply curve has a negative slope.

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