For Most Low-Wage Earners

question 42

Multiple Choice

For most low-wage earners,

• A)the income effect of a wage rate increase is likely to be larger than the substitution effect.
• B)the substitution effect of a wage rate increase is likely to equal the income effect.
• C)the opportunity cost of leisure is high.
• D)the substitution effect of a wage rate increase is likely to be larger than the income effect.