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Questions Are Based on the Following Diagram

Question 40

Multiple Choice

Questions are based on the following diagram:
Questions   are based on the following diagram:   -The equilibrium positions shown in the diagram imply that for a wage increase: A) both the income and substitution effects increase desired work hours B) both the income and substitution effects reduce desired work hours C) the income effect increases desired work hours and the substitution effect reduces desired work hours D) the income effect reduces desired work hours and the substitution effect increases desired work hours
-The equilibrium positions shown in the diagram imply that for a wage increase:


A) both the income and substitution effects increase desired work hours
B) both the income and substitution effects reduce desired work hours
C) the income effect increases desired work hours and the substitution effect reduces desired work hours
D) the income effect reduces desired work hours and the substitution effect increases desired work hours

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