According to the Substitution Effect of Labor Supply, When the Wage

question 115

Multiple Choice

According to the substitution effect of labor supply, when the wage rate goes up

• A) it becomes more costly to consume leisure, so people will work more.
• B) it becomes less costly to consume leisure, so people will work more.
• C) the opportunity cost of enjoying leisure goes down.
• D) firms will hire more workers since people are more willing to work.

---

Definitions:

Phalanges

The skeletal components located in the digits of humans and other vertebrates.

Carpals

The eight small bones that make up the wrist that connect the hand to the forearm.

Metacarpals

The five long bones found in the hand between the wrist (carpals) and the fingers (phalanges), making up the palm.

Phalanges

The skeletal structures found within human fingers and toes.