Which of the Following Statements Is Not Correct

question 347

Multiple Choice

Which of the following statements is not correct?

• A)If Fiona gets a higher wage and works more, the substitution effect is greater than the income effect for her.
• B)If Miguel experiences a wage decrease and works less, the income effect is greater than the substitution effect for him.
• C)If the substitution effect is greater than the income effect, the labor-supply curve is upward sloping.
• D)If the income effect is greater than the substitution effect, the labor-supply curve is downward sloping.

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Definitions:

Net Earnings

The amount of income left after deductions, such as taxes and social security charges, have been subtracted from gross income.

Paycheck

A document or electronic transfer that provides payment for employment services rendered, typically issued periodically at fixed intervals, like weekly or monthly.

Wage And Tax Statement

An official document, often referred to as a W-2 form in the United States, that reports an employee's annual wages and the amount of taxes withheld from their paycheck.

Federal Income

Revenue collected by the federal government, mainly from taxes such as income taxes and corporate taxes.