Within the labour-leisure framework,when an individual's income effect is stronger than the substitution effect from a wage increase,it means they have a(n):
A) inverted U-shaped labour supply curve.
B) labour supply curve that is upward sloping but from the origin.
C) downward-sloping labour supply curve in the wage range in question.
D) upward-sloping labour supply curve in the wage range in question.

Question

Quizplus · Accepted Answer

When an individual's income effect is stronger than the substitution effect from a wage increase, it means that the individual will consume more leisure time and work less despite the increase in wage rate. This results in a downward-sloping labour supply curve in the wage range in question. Therefore, option C is the correct answer.

Within the Labour-Leisure Framework,when an Individual's Income Effect Is Stronger