Ryan Experiences an Increase in Her Wages

question 56

Multiple Choice

Ryan experiences an increase in her wages. The hours of labor that she supplies to the market would increase if

• A)the income effect is larger than the substitution effect.
• B)the substitution effect is larger than the income effect.
• C)neither the income effect nor the substitution effect apply to Ryan's labor-leisure tradeoff.
• D)Ryan views both labor and leisure as inferior goods.

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Definitions:

Great Depression

A severe worldwide economic downturn that lasted from 1929 to the late 1930s, marked by widespread unemployment, deflation, and a sharp decrease in global trade and industrial production.

Louisiana Senator

A member of the U.S. Senate representing the state of Louisiana, a position elected by the citizens of Louisiana to serve as their legislative representative in the federal government.

The Rich

Individuals or households possessing significant wealth or financial resources, often associated with influence, power, and the ability to affect social, economic, and political processes.

Democratic Senator

A member of the U.S. Senate who is affiliated with the Democratic Party, participating in legislation and policy formulation.