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Over the Backward Bending Portion of the Labour Supply Curve

Question 31

Multiple Choice

Over the backward bending portion of the labour supply curve,


A) There is no longer a trade-off between income and leisure.
B) The substitution effect of a wage change dominates the income effect.
C) The wage elasticity of labour demand is inelastic.
D) The wage elasticity of labour supply is negative.
E) Leisure becomes an inferior good.

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