OE JO T7 UonsOB and CO A and CAlthough individual labor supply curves, such as the oneshown, can be backward bending, the market labor supplycurve will tend to be upward sloping across all wage rates.This is becauseO economies of scale dominate the substitution effect atmarket level.O higher wage rates will draw more people into agiven market.O the substitution effect tends to dominate at themarket level.diseconomies of scale dominate the income effect atmarket level. ResourcesSubmit AllQuestion 21 of 30<.The graph shows an individual labor supply curve. Use thegraph to answer the questions.Between which two points on the graph does the incomeeffect outweigh the substitution effect?Between pointsВB and CO A and COD and EOC and EQuantity of laborBetween which two points on the graph does the substitutioneffect outweigh the income effect?8:246°F12/1aWage rate

Option B is the correct answer: higher wage rates will draw more people into a given market.…

Answered: Ithough individual labor supply curves,…

Ithough individual labor supply curves, such as the one own, can be backward bending, the market labor supply rve will tend to be upward sloping across all wage rates.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

OE JO T7 Uons
OB and C
O A and C
Although individual labor supply curves, such as the one
shown, can be backward bending, the market labor supply
curve will tend to be upward sloping across all wage rates.
This is because
O economies of scale dominate the substitution effect at
market level.
O higher wage rates will draw more people into a
given market.
O the substitution effect tends to dominate at the
market level.
diseconomies of scale dominate the income effect at
market level.

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