If Larry Is Given a $2-Per-Hour Pay Increase, and in Response

question 36

Multiple Choice

If Larry is given a $2-per-hour pay increase, and in response, he decides to work less overtime, then

• A) Larry's labor supply curve is flat.
• B) Larry's labor supply curve is upward sloping.
• C) the income effect is dominating the substitution effect.
• D) the substitution effect is dominating the income effect.

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Definitions:

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