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If an Individual's Income Effect Is Stronger Than the Individual's

Question 46

Multiple Choice

If an individual's income effect is stronger than the individual's substitution effect,a wage increase will cause that individual to


A) increase hours worked, and this increase will be larger than if the same change in wealth were caused by a change in non-labor income.
B) decrease hours worked, but this decrease will be smaller than if the same change in wealth were caused by a change in non-labor income.
C) decrease hours worked, and this decrease will be larger than if the same change in wealth were caused by a change in non-labor income.
D) increase hours worked, but this increase will be smaller than if the same change in wealth were caused by a change in non-labor income.

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