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In Order for a Labour Supply Curve to Be Backward

Question 69

Multiple Choice

In order for a labour supply curve to be backward bending at high wages,


A) leisure must be an inferior good.
B) the substitution effect of a wage increase must be greater than the income effect.
C) workers must have an irrational response to wage increases.
D) the income effect of a wage increase must be greater than the substitution effect.

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