If the Wage Rate Increases,the Substitution Effect Gives a Household

question 3

Multiple Choice

If the wage rate increases,the substitution effect gives a household the incentive to

• A)raise its reservation wage.
• B)increase leisure and decrease work.
• C)increase work and decrease leisure.
• D)increase both work and leisure.
• E)decrease both work and leisure.

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Definitions:

Co-payment

A fixed amount paid by a health insurance plan member for covered services, with the remainder being covered by the insurance.

Deductible

The amount paid out of pocket by the policyholder before an insurance policy begins to pay.

Incentivize

To provide motivation or encouragement through rewards or benefits, aiming to promote certain behaviors or actions.

Insurable Interest

A principle that requires an individual to have a stake in the safety or preservation of the insured object against loss or damage.