Your Boss Has Told You That You Will Receive an Increase

question 17

Multiple Choice

Your boss has told you that you will receive an increase in your salary next year.In response to this news,you would reduce your labour supply because

• A)the income effect would be equal to the substitution effect.
• B)the substitution effect would be stronger than the income effect.
• C)there would be an income effect but no substitution effect.
• D)there would be a substitution effect,but no income effect.

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Definitions:

Sensorimotor Substage

A phase in Piaget's theory of cognitive development, where infants learn through interacting with their environment using their senses and motor abilities.

Pleasurable Activities

Actions or experiences that provide enjoyment, happiness, or satisfaction to an individual.

Goal

A desired outcome or target that an individual or group aims to achieve, often requiring planning and effort to attain.

Systematically Varied

Altered or adjusted in a methodical manner to observe changes under different conditions.