A backward-bending labor supply curve is possible only if leisure is an inferior good.

Question

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A backward-bending labor supply curve occurs when higher wages initially increase the quantity of labor supplied but after a certain point, higher wages lead to a decrease in the quantity of labor supplied as individuals prefer more leisure over additional income. This phenomenon does not require leisure to be an inferior good; it reflects the trade-off between labor and leisure as income effects may dominate substitution effects at higher wage levels.

A Backward-Bending Labor Supply Curve Is Possible Only If Leisure