Judy's individual labour supply curve is positively sloped,so for Judy,the income effect dominates the substitution effect.

Question

Quizplus · Accepted Answer

If Judy's individual labour supply curve is positively sloped, it suggests that the substitution effect dominates the income effect. This is because as the wage rate increases, Judy will be more inclined to work longer hours in order to earn more income. This is the substitution effect. The income effect, on the other hand, suggests that as the wage rate increases, Judy may choose to work fewer hours due to the increased income providing her with the ability to attain her desired level of consumption with less work. However, this is opposite to what is suggested in the statement, therefore the answer is B.

Judy's Individual Labour Supply Curve Is Positively Sloped,so for Judy,the