The Substitution Effect of a Wage Decrease in the Work-Leisure

question 447

Multiple Choice

The substitution effect of a wage decrease in the work-leisure model results in the worker choosing to

• A)work less than before.
• B)work more than before.
• C)possibly work more or less than before.
• D)work more with a higher level of consumption.

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Definitions:

Cost of Goods Sold

Direct spending associated with producing the merchandise a company trades, including both materials and manpower costs.

Worksheet

A columnar device used by accountants to aid them in completing the accounting cycle—often just referred to as "spreadsheet." It is not a formal report.

Revenue

The total income received by a company from its normal business activities, before any expenses are subtracted.