The combined effect of a real wage increase is that
A) the income effect always dominates, leading to fewer hours worked at a higher wage.
B) the substitution effect always dominates, leading to more hours worked at a higher wage.
C) if the substitution effect outweighs the income effect, the labor supply curve slopes downward, but if the income effect outweighs the substitution effect, the labor supply curve slopes upward.
D) if the substitution effect outweighs the income effect, the labor supply curve slopes upward, but if the income effect outweighs the substitution effect, the labor supply curve slopes downward.
D
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Refer to the figure above. What does the region ABDC indicate?
A) Economic profit B) Loss incurred by the producer C) Consumer surplus D) Deadweight loss
A country's current account
A) balance equals the change in its net foreign wealth. B) balance equals the change in its foreign wealth. C) surplus equals the change in its foreign wealth. D) deficit equals the change in its foreign wealth. E) balance equals its GNP.
Costs exist because ______.
a. the government establishes price controls b. goods and services are taxed and subsidized c. trade is a system of voluntary exchange d. resources are scarce and have competing uses
Suppose the production function is given by Q = 2K + L. If w = $4 and r = $4, how many units of K and L will be utilized in the production process?
A. All L and no K. B. All K and no L. C. A combination of K and L not represented above. D. Equal amounts of K and L.