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    Question

    What type of supply curve represents a situation where,

    after a certain level, an increase in wage rate decreases labor supply?
    A Perfectly Inelastic Correct Answer Incorrect Answer
    B Inelastic Correct Answer Incorrect Answer
    C Exceptional (Backward Tending) Correct Answer Incorrect Answer
    D Elastic Correct Answer Incorrect Answer

    Solution

    The exceptional or backward-tending labor supply curve represents situations where an increase in price (wage rate) decreases the supply of labor.

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