Which of the Following Would Unambiguously Predict a Decrease in Desired

question 34

Multiple Choice

Which of the following would unambiguously predict a decrease in desired hours of work?

• A)The substitution effect of a wage decrease
• B)The income effect of a wage decrease
• C)A wage increase
• D)The substitution effect of a decline in income tax rates

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Definitions:

U.S. Business

Refers to commercial, industrial, or professional activities conducted within the United States aimed at generating profit or economic growth.

Long-Run Supply Curve

A graphical representation that shows how the quantity supplied of a good changes in response to a price change once producers have had enough time to adjust their production decisions fully.

Constant-Cost Industry

An industry in which costs of production do not change as the industry's output changes.

Decreasing-Cost Industry

An industry where the costs of production decrease as the industry grows and output increases, due to factors such as economies of scale.