Multiple Choice
According to the substitution effect, an increase in the wage rate will lead the worker to
A) work more hours if leisure is a normal good.
B) work more hours if leisure is an inferior good.
C) work fewer hours if leisure is a normal good.
D) work fewer hours if leisure is an inferior good.
E) work more hours regardless of whether leisure is normal or inferior.
Correct Answer:
Verified
Correct Answer:
Verified
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