Which of the Following Statements Is True

question 133

Multiple Choice

Which of the following statements is true?

• A)As the wage rate rises, the substitution effect decreases the opportunity cost of leisure and causes a worker to devote more time to working and less time to leisure.
• B)As the wage rate rises, the substitution effect increases the opportunity cost of leisure and causes a worker to devote more time to working and less time to leisure.
• C)As the wage rate rises, the income effect increases the opportunity cost of leisure and causes a worker to devote more time to working and less time to leisure.
• D)As the wage rate rises, the income effect causes a worker to devote more time to work and less time to leisure.

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Definitions:

Levied

The imposition or collection of a tax, charge, or fine.

Market Activity

The various transactions, movements, and behaviors of participants that occur within a marketplace, influencing the supply and demand of goods and services.

Taxes

Mandatory monetary fees or different forms of levies collected from taxpayers by government entities to support government expenses and a range of public services.

Buyers

Individuals or organizations that purchase goods or services for personal use, consumption, or to use in the production of other goods and services.