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The Labour Supply Curve May Eventually Become "Backward Bending" at High

Question 45

Multiple Choice

The labour supply curve may eventually become "backward bending" at high wages because


A) the substitution effect on the demand β1 leisure dominates the income effect.
B) the income effect on the demand β1 leisure dominates the substitution effect.
C) firms demand added productivity from the workers as the wage reaches very high levels.
D) at high wage rates,the reservation wage rate rises.
E) people get tired of working so many hours and refuse to increase their labour supply.

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