If an individual's labor supply curve is upward-sloping at low wage rates and downward-sloping at high wage rates, then at higher wage rates:
A) there is no substitution effect as wages change.
B) there is no income effect as wages change.
C) the income effect dominates the substitution effect.
D) the substitution effect dominates the income effect.

Question

Quizplus · Accepted Answer

At higher wage rates, the income effect dominates the substitution effect, leading individuals to work less as wages increase because they can maintain the same standard of living with fewer hours worked.

If an Individual's Labor Supply Curve Is Upward-Sloping at Low