Use the following to answer questions :
Figure: The Time Allocation Budget Line
-Diana's labour supply curve changes slope and begins to bend backward at a wage of $44.Thus,for a wage _____ $44,the substitution effect of a wage increase will _____.
A) above;cause Diana to work fewer hours
B) below;cause Diana to work fewer hours
C) below;dominate the income effect
D) above;cause Diana to work more hours

Question

Use the following to answer questions :
Figure: The Time Allocation Budget Line 
-Diana's labour supply curve changes slope and begins to bend backward at a wage of $44.Thus,for a wage _____ $44,the substitution effect of a wage increase will _____.
A) above;cause Diana to work fewer hours 
B) below;cause Diana to work fewer hours 
C) below;dominate the income effect 
D) above;cause Diana to work more hours

Quizplus · Accepted Answer

The Answer is C

Use the Following to Answer Questions