By Itself, the Substitution Effect of an Increase in the Wage

question 100

Multiple Choice

By itself, the substitution effect of an increase in the wage rate will

• A)always lead to an increase in the quantity of labor supplied
• B)always lead to a decrease in the quantity of labor supplied
• C)lead to an increase in the quantity of labor supplied only if leisure is like a normal good
• D)lead to an increase in the quantity of labor supplied only if leisure is not a normal good
• E)lead to an increase in the quantity of labor supplied only if the income effect works in the same direction