Within the labor-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 labor supply curve.
B)labor supply curve that is upward sloping but from the origin.
C)downward-sloping labor supply curve in the wage range in question.
D)upward-sloping labor supply curve in the wage range in question.

Question

Quizplus · Accepted Answer

A stronger income effect than substitution effect means that the individual will work less as their real income has increased, which results in a downward-sloping labor supply curve in the wage range in question.

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