The Substitution Effect from a Change in Wages Is

question 89

Multiple Choice

The substitution effect from a change in wages is

• A)when people switch to higher paying jobs.
• B)when people work less as their income increases.
• C)when companies use more capital or other inputs as wages increase and more labor when wages decrease.
• D)when people have an incentive to work more when wages increase and less when they decrease.

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Definitions:

Unlimited Liability

A situation where business owners are personally responsible for all of the company's debts, without any limit.