When an individual's wage rises,the income effect tends to
A)increase hours worked.
B)decrease hours worked.
C)leave hours worked unchanged.
D)it is impossible to predict what will happen to hours worked.

Question

Quizplus · Accepted Answer

As an individual's wage rises, their income increases, which means they have more purchasing power. Therefore, they may choose to work fewer hours and enjoy more leisure time, leading to a decrease in hours worked. This is known as the income effect.

When an Individual's Wage Rises,the Income Effect Tends to