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If Larry Is Given a $2-Per-Hour Pay Increase, and in Response

Question 12

Multiple Choice

If Larry is given a $2-per-hour pay increase, and in response, he decides to work less overtime, then


A) Larry's labor supply curve is flat.
B) Larry's labor supply curve is upward sloping.
C) the income effect is dominating the substitution effect.
D) the substitution effect is dominating the income effect.

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