For which of the following workers would the income effect be more likely to outweigh the substitution effect of an increase in wage?
A)Gardener
B)Teacher
C)Professional athlete
D)Plumber

Question

Quizplus · Accepted Answer

The income effect is more likely to outweigh the substitution effect for workers whose job involves a significant amount of leisure or non-work-related activities, such as professional athletes. When their wage increases, they may choose to work less and enjoy more leisure time, as the increase in income allows them to maintain their desired standard of living even with fewer working hours. This is not as likely for workers like gardeners, teachers, or plumbers, who may have more fixed work hours and cannot easily reduce their work time without a significant decrease in income.

For Which of the Following Workers Would the Income Effect