Which of the Following Is True for Most Wage Earners

question 178

Multiple Choice

Which of the following is true for most wage earners?

• A)The income effect of a wage rate increase is likely to be larger than the substitution effect.
• B)The substitution effect of a wage rate increase is likely to equal the income effect.
• C)The opportunity cost of leisure is high.
• D)The substitution effect of a wage rate increase is likely to be larger than the income effect.

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