An Increase in the Wage Rate Will Lead to a Reduction

question 103

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 costs of leisure do not increase
• D)the opportunity costs of working always increase
• E)workers are irrational because otherwise they would be violating the law of supply

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