For a typical person who is currently earning a low wage rate, the
A) substitution effect of a wage rate increase usually is stronger than the income effect
B) substitution effect of a wage rate increase usually is weaker than the income effect
C) income effect of a wage rate increase is usually zero
D) substitution effect of a wage rate increase is usually zero
E) substitution and income effects of a wage rate increase tend to work in the same direction
Correct Answer:
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Q52: Because leisure is a normal good, an
Q53: If my wage rate increases, utility maximization
Q54: The substitution effect of a decrease in
Q55: As the wage rate falls, a utility-maximizing
Q56: If nonmarket work is a normal good,
Q58: Exhibit 12-1 Q59: An increase in the wage rate will Q60: As the wage rate decreases, the amount Q61: Exhibit 12-3 Q62: A person who wins a large sum
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