Which Statement Is TRUE

question 76

Multiple Choice

Which statement is TRUE?

• A) The income effect of a wage increase is to consume less leisure.
• B) The substitution effect of a wage decrease is to consume less leisure.
• C) The price of leisure decreases with a decrease in wages.
• D) The price of leisure increases with an increase in income.

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Definitions:

High-Productivity People

Individuals who consistently generate significant outputs or results in relation to the time and resources used, often contributing to economic growth.

Educational Level

A measure of the highest degree of schooling or training achieved by an individual, often impacting employment opportunities and earnings potential.

Threshold

The point at which a particular effect, reaction, or change occurs, often marking the boundary or limit for certain actions.

Lemons Problem

A market problem arising when buyers cannot distinguish between high-quality and low-quality products, leading to an overall drop in product quality.