The figure given below shows a backward-bending labor supply curve for an individual. In the figure below, which of the following is true when the wage rate increases from $9 to $11?
Figure 12.3

A) The substitution effect will cancel out the income effect.
B) The income effect will cause the person to work more hours.
C) The substitution effect will cause the person to work fewer hours.
D) The income effect will cause the person to work the same number of hours.
E) The substitution effect will cause the person to work the same number of hours.
Correct Answer:
Verified
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