Figure 21-24

-Refer to Figure 21-24.Anna experiences an increase in her hourly wage.Her optimal choice point moves from A to B.For Anna,

Question

Figure 21-24
 
-Refer to Figure 21-24.Anna experiences an increase in her hourly wage.Her optimal choice point moves from A to B.For Anna,

Quizplus · Accepted Answer

Anna's labor supply curve is backward bending because an increase in her wage allows her to receive more income for each hour she works, but it also increases her opportunity cost of leisure time, leading her to work fewer hours overall. This results in her optimal choice point moving from A to B, indicating a decrease in her labor supply. Choice C (leisure is an inferior good) is incorrect as there is no information provided in the figure to support this statement.

Figure 21-24 -Refer to Figure 21-24.Anna Experiences an Increase in Her Hourly