Figure 10.3
-Refer to Figure 10.3.In Panel A,at high wages (segment iii)
A) the price of leisure is rising relative to the price of labour.
B) the price of leisure is falling relative to the price of labour.
C) labourers work more as wages increase.
D) labour suppliers take more leisure as wages increase.

Question

Figure 10.3 
-Refer to Figure 10.3.In Panel A,at high wages (segment iii)
A) the price of leisure is rising relative to the price of labour. 
B) the price of leisure is falling relative to the price of labour. 
C) labourers work more as wages increase. 
D) labour suppliers take more leisure as wages increase.

Quizplus · Accepted Answer

At high wages, the substitution effect is outweighed by the income effect, leading labour suppliers to take more leisure as wages increase.

Figure 10.3 -Refer to Figure 10.3.In Panel A,at High Wages (Segment Iii)