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.

---

Definitions:

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Transactional Approach

An accounting method focusing on recording individual business transactions and their impact on the financial statements.

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is actually received or paid.

Conceptual Identity

This key term is not a standard accounting or financial concept. NO.