If the Income Effect Is Less Than the Substitution Effect

question 289

Multiple Choice

If the income effect is less than the substitution effect and the wage rate decreases, individuals

• A) will supply more work.
• B) will supply less work.
• C) will consume less leisure.
• D) cannot be determined from the given information

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Definitions:

Identification

The process of recognizing or establishing the identity of a person or thing, often through specific documents or unique identifiers.

Calves

Young bovine animals, especially domestic cows or bulls in their first year.

F.O.B. New York

A contractual term indicating that the seller delivers goods, ready for shipment, to a specific location in New York, with the buyer assuming shipping costs and risk of loss.

Transport

The action or process of moving goods or people from one place to another.