An Individual's Supply Curve of Labor Is Backward Bending When

question 57

Multiple Choice

An individual's supply curve of labor is backward bending when:

• A)the income effect dominates at lower wage rates and the substitution effect dominates at higher wage rates.
• B)the substitution effect dominates at lower wage rates and the income effect dominates at higher wage rates.
• C)the substitution and income effect work in the same direction at lower wage rates but in opposite directions at higher wage rates.
• D)the substitution and income effect offset each other at lower wage rates but work in opposite directions at higher wage rates.

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