Consider Figure 2

question 16

Multiple Choice

Consider figure 2.98 in the textbook. Given a wage increase from W0 to W1, the distance between I' and I1 represents:

• A) The equilibrium choice for hours worked
• B) The income effect
• C) The net effect of both the substitution effect and the income effect
• D) The substitution effect
• E) The equilibrium choice for leisure

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Definitions:

Mass

A property of a physical body which determines the body's resistance to being accelerated by a force and the strength of its mutual gravitational attraction with other bodies.

Fragments

Smaller parts or pieces that have broken off or been separated from something whole.

Density

The mass per unit volume of a substance, indicating how compact or sparse the substance is.

Displace

To move or force something/someone away from their usual or original position.