As the wage rate rises, the income effect influences workers to choose ________ leisure, and the substitution effect influences workers to choose ________ leisure.
A) more; less
B) more; more
C) less; less
D) less; more
At high wage rates, the labor supply curve bends backward because the ________ effect dominates the ________ effect.
A) income; price
B) substitution; income
C) substitution; price
D) income; substitution
The labor supply curve is backward bending because
A) as the wage rate rises, the substitution effect becomes larger than the income effect.
B) as the wage rate rises, the income effect becomes larger than the substitution effect.
C) an increase in the wage rate shifts the supply of labor curve leftward at higher wages.
D) an increase in the wage rate shifts the supply of labor curve rightward at higher wages.
If your labor supply increases when you get a raise, which of the following is TRUE?
A) Your substitution effect is greater than your income effect.
B) Your substitution effect is less than your income effect.
C) Your substitution effect equals your income effect.
D) None of the above answers is correct.