At a low wage rate,
A) there is no substitution effect.
B) there is no income effect.
C) the substitution effect usually outweighs the income effect.
D) the income effect usually outweighs the substitution effect.
E) the disutility of market work is usually high.

Question

Quizplus · Accepted Answer

At a low wage rate, the substitution effect usually outweighs the income effect because individuals are more likely to substitute leisure for work to increase their income.

At a Low Wage Rate