Figure 17-4 -Refer to Figure 17-4. Which of the Following Is True

question 11

Multiple Choice

Figure 17-4
-Refer to Figure 17-4. Which of the following is true if the wage rate increases from W₀ to W₁?

• A) The income effect is larger than the substitution effect.
• B) The substitution effect is larger than the income effect.
• C) The income effect and the substitution effect are equal.
• D) The supply curve is unit elastic.