Multiple Choice
If Rita's labor-supply curve is downward-sloping, then for Rita
A) an increase in the wage creates an income effect that is greater than the substitution effect.
B) an increase in the wage creates a substitution effect that is greater than the income effect.
C) leisure and consumption are perfect substitutes.
D) leisure and consumption are perfect complements.
Correct Answer:
Verified
Correct Answer:
Verified
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