If the substitution effect of a wage increase dominates the income effect, the labour supply curve has a positive slope.

Name: If the substitution effect of a wage increase dominates the income effect, the labour supply curve has a positive slope.
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Quizplus · Accepted Answer

When the substitution effect of a wage increase dominates the income effect, individuals will be more likely to work more hours because the wage increase makes each hour of work more valuable. This results in an upward sloping labour supply curve.

If the Substitution Effect of a Wage Increase Dominates the Income