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In Exhibit 12­2, Which of the Following Is True at a Wage

Question 41

Multiple Choice

In Exhibit 12­2, which of the following is true at a wage rate of $20? A) The income effect dominates the substitution effect. B) The substitution effect dominates the income effect. C) No labor is supplied. D) The income effect equals the substitution effect. E) The supply curve is horizontal. In Exhibit 12­2, which of the following is true at a wage rate of $20?


A) The income effect dominates the substitution effect.
B) The substitution effect dominates the income effect.
C) No labor is supplied.
D) The income effect equals the substitution effect.
E) The supply curve is horizontal.

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