Which of the following two statements is true of the graph shown above?
Statement 1:The graph leads to a supply of labor curve that is positively sloped throughout.
Statement 2:The opportunity cost of leisure is lower at point A than at point D.
A)Statement 1
B) Statement 2
C)Both statements are true
D)None of the statements is true

Question

Which of the following two statements is true of the graph shown above? 
Statement 1:The graph leads to a supply of labor curve that is positively sloped throughout. 
Statement 2:The opportunity cost of leisure is lower at point A than at point D. 
A)Statement 1
B) Statement 2
C)Both statements are true
D)None of the statements is true

Quizplus · Accepted Answer

Statement 1 is not true as the graph shows a change in the slope from positive to negative, indicating a backward-bending labor supply curve. 
Statement 2 is true as the opportunity cost of leisure is the wage rate, and at point A, the wage rate is lower than at point D, making the opportunity cost of leisure lower at point A.

Which of the Following Two Statements Is True of the Graph