Solved

Lakisha's Labor Supply Curve Is Downward Sloping for Wage Rates

Question 125

Multiple Choice

Lakisha's labor supply curve is downward sloping for wage rates greater than $40 per hour and upward sloping for wage rates less than $40 per hour.If leisure is a normal good for Lakisha, then:


A) if the wage is greater than $40, the substitution effect of a wage increase is greater than the income effect.
B) if the wage is $18, the substitution effect of a wage increase is less than the income effect.
C) if the wage is greater than $40, the substitution effect of a wage increase is less than the income effect.
D) if the wage is greater than $20, the substitution effect of a wage increase is less than the income effect.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions