4 . Understanding the backward-bending labour supply curve Nick has the following labour supply curve: Labour Supply W. W. WAGE RATE (Dollars per hour) W3 LABOUR (Hours)LABOUR (Hours) between W2 and W1 lower than W2 between W} and W, above W1 The income effect of a higher wage outweighs the substitution effect when wages are The income effect is the phenomenon that workers choose to work V hours when they are given a raise, becausemore The income effect of a higher wage outweighs the substitution effed vages are fewer The income effect is the phenomenon that workers choose to work hours when they are given a raise, becauseme opportunity cost of leisure has risen they can afford to buy more leisure they can afford to buy less leisure s the substitution effect when wages are V . the opportunity cost of leisure has fallen orkers choose to work 7 hours when they are given a raiser because Y