When the ________ effect dominates the ________ effect, the labor supply curve is ________.

Question

Quizplus · Accepted Answer

When the income effect dominates the substitution effect, the labor supply curve is negatively sloped. This is because the income effect causes people to work less when their wages increase, while the substitution effect causes people to work more when their wages increase. The negative slope of the labor supply curve indicates that the income effect is stronger than the substitution effect.

When the ________ Effect Dominates the ________ Effect, the Labor

When the Effect Dominates the Effect, the Labor