The Substitution Effect of a Decrease in the Wage Rate

question 136

Multiple Choice

The substitution effect of a decrease in the wage rate causes the quantity of labor supplied to

• A)increase
• B)increase only if the individual desires more leisure time
• C)increase only if the substitution effect outweighs the income effect
• D)decrease
• E)decrease only if the individual lowers the value of leisure time

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