When Wages Increase

question 30

Multiple Choice

When wages increase,

• A) the scale and substitution effects counteract each other and the firm's demand for labor remains the same.
• B) the scale and substitution effects move in the same direction and the firm's demand for labor decreases.
• C) the scale and substitution effects move in the same direction and the firm's demand for labor increases.
• D) the scale and substitution effects move in opposite directions and the firm's demand for labor decreases.
• E) the scale and substitution effects move in opposite directions and the firm's demand for labor increases.

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