The Substitution Effect of Wages States That a Decreased Wage

question 83

Multiple Choice

The substitution effect of wages states that a decreased wage rate

• A)Encourages people to consume less leisure.
• B)Will shift the labor supply curve rightward.
• C)Will lead to a movement up along the existing supply curve.
• D)Encourages people to work less hours.

---

Definitions:

Federal Securities

Financial instruments issued by the federal government, including Treasury bills, notes, and bonds, which are used to finance government spending.

Depository Institutions

Commercial banks and thrift institutions; financial institutions that accept deposits from the public

Customer Deposits

Funds placed by customers with a company, often in the context of financial services, which may be used for further transactions or withdrawn later.

Maximize Profits

The objective of optimizing the difference between total revenues and total costs to achieve the highest possible financial gain.