An Increase in the Wage Rate Will Lead to a Reduction

question 184

Multiple Choice

An increase in the wage rate will lead to a reduction in the quantity of labor supplied if _____

• A)the substitution effect outweighs the income effect.
• B)the income effect outweighs the substitution effect.
• C)the opportunity cost of leisure does not increase.
• D)the opportunity cost of working always increases.
• E)workers are irrational because otherwise they would be violating the law of supply.

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Definitions:

Society

A large group of people associated with each other through persistent social interactions, shared geographical or social territory, and subject to the same political authority and dominant cultural expectations.

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The mandates or conditions specified in the Constitution that govern how the U.S. government operates and what qualifications individuals must meet to hold certain positions.

Congress

The legislative branch of the United States federal government, consisting of the Senate and the House of Representatives.

Society

A group of individuals involved in persistent social interaction, or a large social group sharing the same geographical or social territory.