When Does a Higher Wage Rate Lead to an Increase

question 66

Multiple Choice

When does a higher wage rate lead to an increase in the number of work hours supplied by laborers?

• A) Always.
• B) When the substitution effect outweighs the income effect.
• C) When the income effect outweighs the substitution effect.
• D) Never.

---

Definitions:

Political Party

An organized group of people with similar political aims and opinions, seeking to influence public policy by getting its candidates elected to public office.

Identity Formation

The process of developing a distinct personality or self-concept, often occurring during adolescence.

Moratorium

A temporary suspension or delay of an activity or a law, often used to refer to a period of deferment of duties or obligations.

Education Major

A field of academic study based on the interest and future career path chosen by a college or university student.