The Income Effect of a Higher Real Wage on the Quantity

question 102

Multiple Choice

The income effect of a higher real wage on the quantity of labor supply is the

• A)idea that workers feel psychologically wealthier when wages are higher, so they work more.
• B)effect that income must rise when wages rise.
• C)tendency of workers to supply more labor in response to becoming wealthier.
• D)tendency of workers to supply less labor in response to becoming wealthier.