For the past year, Ted has had a part- time job at which he is willing to work 30 hours each week. During Ted's annual review, his boss grants him an 8 per cent increase in his wage. As a result of the wage increase, Ted is now willing to work 25 hours each week. Ted's opportunity cost of _______
Has risen and for Ted the substitution effect of the wage hike is _______ than the income effect.
A) work; greater
B) leisure; less
C) work; less
D) leisure; greater

Question

Quizplus · Accepted Answer

The Answer of For the past year, Ted has had a part- time job at which he is willing to work 30 hours each week. During Ted's annual review, his boss grants him an 8 per cent increase in his wage. As a result of the wage increase, Ted is now willing to work 25 hours each week. Ted's opportunity cost of _______
Has risen and for Ted the substitution effect of the wage hike is _______ than the income effect.
A) work; greater
B) leisure; less
C) work; less
D) leisure; greater

For the Past Year, Ted Has Had a Part- Time