The Figure Given Below Shows a Backward-Bending Labor Supply Curve

question 22

Multiple Choice

The figure given below shows a backward-bending labor supply curve for an individual. In the figure below, which of the following is true at a wage rate of $7? ​
Figure 12.3
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• A)The income effect dominates the substitution effect.
• B)The substitution effect dominates the income effect.
• C)The income effect exactly offsets the substitution effect.
• D)No labor is supplied.
• E)The individual will supply 30 hours of labor.

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