11. Again, considering the graph to the right, after the increase in wages we observe her new consumption/leisure to be at the point N. This suggests that:
  1. she is on the backward bending portion of her labor supply curve.
  2. she is being paid too much.
  3. the opportunity cost of leisure has fallen for her.
  4. consumer goods are inferior goods for her.
  5. the income effect of her wage increase is dominated by the substitution effect.

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