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.

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Definitions:

World Bank

A worldwide financial entity providing lending and grants to underdeveloped countries' governments for capital project development.

Real Output

The total value of all goods and services produced in an economy, adjusted for inflation, reflecting the actual productivity.

Per Capita

A statistical measure that divides an aggregate by the number of individuals in a population to give an average.

Industrially Advanced

Pertaining to countries or regions that have highly developed and complex industrial sectors, often characterized by innovation and high levels of production and income.