If a Person Supplies Fewer Hours of Labor in Response

question 40

Multiple Choice

If a person supplies fewer hours of labor in response to a wage increase,then

• A) the substitution effect is greater than the income effect.
• B) the income effect is greater than the substitution effect.
• C) the income effect equals the substitution effect.
• D) the person is not maximizing utility.

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Definitions:

Capillary Bed

Networks of small blood vessels that facilitate the exchange of materials (such as oxygen and carbon dioxide) between the blood and tissues.

Sweat Gland

A specialized epidermal structure involved in the production of sweat, playing a key role in body temperature regulation.

Thymus Gland

A gland located in the chest that is part of the immune system, involved in the development of T lymphocytes.

Parathyroid Gland

Small glands located in the neck behind the thyroid that regulate calcium levels in the blood and bone metabolism.