Because of the income effect, the labour supply curve is
A) horizontal.
B) backward- bending.
C) positively sloped.
D) vertical.

Question

Quizplus · Accepted Answer

The income effect suggests that as wages increase, individuals may choose to work less because they can maintain the same standard of living with fewer hours worked. This can lead to a backward-bending labor supply curve, where the curve bends backward at higher wage levels as people opt for more leisure over additional income.

Because of the Income Effect, the Labour Supply Curve Is