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An Increase in Wealth Will Cause the Labor Supply Curve

Question 287

Multiple Choice

An increase in wealth will cause the labor supply curve to:


A) shift leftward if leisure is a normal good.
B) slope downward if the substitution effect dominates the income effect.
C) slope upward only if leisure is an inferior good.
D) bend backward if the income effect outweighs the substitution effect of a change in wealth and if leisure is a normal good.

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