The labour supply curve has a
A) positive slope always.
B) negative slope always.
C) negative slope if the income effect is greater than the substitution effect.
D) positive slope if the income effect is greater than the substitution effect.

Question

Quizplus · Accepted Answer

The labour supply curve can have a negative slope if the income effect (desire for more leisure as income increases) outweighs the substitution effect (desire to work more as wages increase).

The Labour Supply Curve Has a