For a typical person who is currently earning a low wage rate, the:
A) substitution effect of a wage rate increase usually is stronger than the income effect.
B) substitution effect of a wage rate increase usually is weaker than the income effect.
C) income effect of a wage rate increase usually is zero.
D) substitution effect of a wage rate increase usually is zero.
E) substitution and income effects of a wage rate increase tend to work in the same direction.
Correct Answer:
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