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An Increase in the Wage Rate Will Lead to a Reduction

Question 59

Multiple Choice

An increase in the wage rate will lead to a reduction in the quantity of labor supplied if


A) the substitution effect outweighs the income effect
B) the income effect outweighs the substitution effect
C) the opportunity costs of leisure do not increase
D) the opportunity costs of working always increase
E) workers are irrational because otherwise they would be violating the law of supply

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