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.