An Increase in the Real Wage Will Cause an Individual

question 69

Multiple Choice

An increase in the real wage will cause an individual to increase his or her supply of labour if

• A)the substitution effect is greater than the income effect.
• B)the income effect is greater than the substitution effect.
• C)the substitution effect is equal to the income effect.
• D)the substitution effect is negative and the income effect is positive.

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Definitions:

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