Refer to Figure 14.1.2 above. Which of these two effects prevails in the backward bending portion of the supply curve?

A) The income effect
B) The substitution effect
C) The leisure effect
D) The wage effect

Backward Bending

A curve, often related to the labor supply, indicating that beyond a certain wage level, as wages increase, individuals may choose to work fewer hours, prioritizing leisure over additional income.

Income Effect

The change in an individual's or economy's income and how that change will impact the quantity demanded of a good or service.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one product for another more affordable one.