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Supply of Labor in Perfect Competition
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Problem 10
Supply of Labor in Perfect Competition
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15. Markets for the Factors of Production / Supply of Labor in Perfect Competition / Problem 7
Problem 7
Illustrate the conditions under which an individual's labor supply curve may bend backward.
A
When the substitution effect outweighs the income effect at low wage levels.
B
When the income effect outweighs the substitution effect at high wage levels.
C
When wages decrease significantly.
D
When leisure becomes an inferior good.
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