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Tim Works 51 Hours Per Week, and His Wage Is

Question 156

Multiple Choice

Tim works 51 hours per week, and his wage is $35 per hour.If his wage increases to $70 per hour, then:


A) the substitution effect implies that he will work less.
B) if leisure is a normal good, the income effect implies that he will work more.
C) if leisure is a normal good, the income effect will reinforce the substitution effect and he will work more.
D) the substitution effect implies that he will work more.

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