The average work week 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

The average work week 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:​

Quizplus · Accepted Answer

The income effect occurs when workers can afford to work fewer hours because their income has increased. The substitution effect occurs when workers work more hours because the opportunity cost of their leisure time has increased. In this case, the income effect of rising wages outweighed the substitution effect, leading to a decrease in the average work week even as wages increased. Therefore, choice C is the best explanation.

The Average Work Week in the United States Has Declined