If the income effect dominates the substitution effect,the labor supply curve will be backward-bending.

Question

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When the income effect dominates, it means that an increase in wages leads to an increase in income, which can cause workers to choose to work less as they enjoy more leisure time. This results in a backward-bending labor supply curve as the substitution effect (where an increase in wages leads to an increase in the opportunity cost of leisure time, causing workers to work more) is outweighed by the income effect.

If the Income Effect Dominates the Substitution Effect,the Labor Supply