Q
Assuming that leisure is a normal good. if an individual’s labour supply curve is backward bending then the ?
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A
A. Income effect is zero
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B
B. Substitution effect outweighs the income effect
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C
C. Income effect outweighs the substitution effect
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D
D. Income effect and the substitution effects are equal
Correct Answer:
C. C. Income effect outweighs the substitution effect
