If a Worker's Desired Hours of Labor Do Not Change

question 1

Multiple Choice

If a worker's desired hours of labor do not change after a decrease in his wage rate,then

• A) his income effect dominates his substitution effect.
• B) his substitution effect dominates his income effect.
• C) his income and substitution effects are of equal magnitude.
• D) his income and substitution effects are small in absolute value.

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Definitions:

Wrong Material

The use of incorrect or inappropriate materials in the construction or production of goods.

Doctrine of Mistake

A principle in contract law that allows a contract to be nullified if both parties entered into the agreement with a mutual understanding that was fundamentally flawed or incorrect.

Willful Blindness

The deliberate act of avoiding acquiring certain knowledge of a fact, particularly to circumvent legal liability.

Illegal

Illegal refers to actions or activities that are prohibited by law and subject to penalties.