The Labor Supply Curve Is Backward Bending Because

question 308

Multiple Choice

The labor supply curve is backward bending because

• A) as the wage rate rises, the substitution effect becomes larger than the income effect.
• B) as the wage rate rises, the income effect becomes larger than the substitution effect.
• C) an increase in the wage rate shifts the supply of labor curve leftward at higher wages.
• D) an increase in the wage rate shifts the supply of labor curve rightward at higher wages.

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