A wage increase of $1000 is more likely to improve the subjective well-being of low-income workers than of middle-income executives. This illustrates the importance of

Question

Quizplus · Accepted Answer

The concept of diminishing returns phenomenon suggests that as income increases, the incremental increase in subjective well-being decreases. Therefore, a wage increase of $1000 would have a greater impact on the subjective well-being of a low-income worker as compared to a middle-income executive.

A Wage Increase of $1000 Is More Likely to Improve