When Wages Increase, the Income Effect of Labor Supply ________

question 196

Multiple Choice

When wages increase, the income effect of labor supply ________ the quantity of labor supplied because ________.

• A) reduces; the price of leisure has increased
• B) reduces; workers acquire more of all normal goods (including leisure) when income increases
• C) increases; the value of working has increased
• D) increases; the price of leisure has increased

---

Definitions:

Dwarfism

A medical or genetic condition resulting in an adult height significantly below the average.

Growth Hormone

A hormone produced by the pituitary gland that stimulates growth, cell reproduction, and cell regeneration in humans and other animals.

Acromegaly

A hormonal disorder that results from an excess of growth hormone in adults, leading to the enlargement of bones in the hands, feet, and face.

Gigantism

A condition characterized by excessive growth and height significantly above average due to an overproduction of growth hormone.