Your best friend receives a pay raise at her part-time job from $8 to $10 per hour.She used to work 20 hours per week,but now she decides to work 16 hours per week in order to spend more time studying economics.For this price range,her labor supply curve is

Question

Quizplus · Accepted Answer

The labor supply curve is backward sloping because she chooses to work fewer hours despite the increase in wage, indicating that the income effect outweighs the substitution effect.

Your Best Friend Receives a Pay Raise at Her Part-Time