Suppose That Barry's Wage Increases and He Responds by Working

question 130

Multiple Choice

Suppose that Barry's wage increases and he responds by working more hours. Which statement must be TRUE?

• A) Leisure became more expensive, so Barry consumed less of it.
• B) The substitution effect of the wage increase caused Barry to substitute leisure for work.
• C) The income effect of the wage increase dominated the substitution effect of the wage increase.
• D) The substitution effect increased hours of work and the income effect increased hours of work.

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Definitions:

Economic Development

The progress in economic and social well-being including higher income, improved standards of living, and reduction of poverty.

Military Spending

Government expenditure on the military and defense sector, including salaries, hardware, operations, and maintenance.

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, leading to significant advancements in technology, manufacturing, and transportation.

Information Age

The current era characterized by the rapid creation, sharing, and manipulation of information, largely facilitated by digital technology.