Answer the following statement(s) true (T) or false (F)

1. A worker will not supply any labor when the wage rate is less than the marginal value of leisure.
2. The substitution and income effects of a wage increase both cause consumption to rise.
3. An individual's labor supply can become backward bending because high wages tend to magnify substitution effects.
4. A worker's labor supply may either rise or fall when nonlabor income increases, depending on whether the substitution effect or the income effect dominates.
5. A worker's labor supply curve is upward sloping only if the substitution and labor income effects are in the same direction.

1. False
2. True
3. False
4. False
5. False

Economics

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