Question: Question content area Part 1 If wages increase, will a worker supply more labor? Part 2 A . Only if the substitution effect is larger
Question content area
Part
If wages increase, will a worker supply more labor?
Part
A
Only if
the substitution effect is larger than the income effectthesubstitutioneffectislargerthantheincomeeffect
B
No because
purchasing power has increased and leisure is a normal goodpurchasingpowerhasincreasedandleisureisanormalgood
C
Only if
the effect of the increase in purchasing power is larger than that of the opportunity cost of leisure increasingtheeffectoftheincreaseinpurchasingpowerislargerthanthatoftheopportunitycostofleisureincreasing
D
Yes because
the substitution effect causes workers to supply a larger quantity of laborthesubstitutioneffectcausesworkerstosupplyalargerquantityoflabor
E
Yes because the substitution and income effects both cause workers to supply a larger quantity of labor.
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