The average workweek in the United States has declined to fewer than 40 hours even though wage rates have been increasing.The best explanation for this phenomenon is that _____

Question

Quizplus · Accepted Answer

The income effect of rising wages means that as people earn more per hour, they can afford to work fewer hours while maintaining or even improving their standard of living. This outweighs the substitution effect, which would suggest that higher wages encourage more work hours by making leisure time relatively more expensive.

The Average Workweek in the United States Has Declined to Fewer