If the income effect is ________ the substitution effect, the labor supply curve is vertical.
A) greater than
B) smaller than
C) equal to
D) unrelated to

Name: If the income effect is ________ the substitution effect, the labor supply curve is vertical. A) greater than B) smaller than C) equal to D) unrelated to
Brand: Quizplus
Rating: 4.8 (33 reviews)

Question

Quizplus · Accepted Answer

When the income effect is equal to the substitution effect, changes in wage rates have no effect on the quantity of labor supplied, leading to a vertical labor supply curve.

If the Income Effect Is ________ the Substitution Effect, the Labor