-47. The income effect of a wage increase is expected to increase supply of labo
ID: 1130050 • Letter: #
Question
-47. The income effect of a wage increase is expected to increase supply of labor. supply of goods and services. demand for leisure. demand for labor. a. b. c. d. 48. The substitution effect of a wage increase probably leads most workers to want to work more. certainly leads all workers to want to work more. probably leads most workers to want to work less. certainly leads most firms to want to employ more workers. a. b. c. d. Statistical studies in the United States have reached the conclusion that for low-income workers a. b. c. d. 49. the substitution effect is greater than the income effect. the income effect is greater than the substitution effect. the income effect is about equal to the substitution effect. the substitution effect is of the "wrong" sign. 50. Hsup a. b. c. d. more likely than low-wage workers to supply more labor when the wage rate rises. about as likely as low-wage workers to supply more labor when the wage rate rises. less likely than low-wage workers to supply more labor when the wage rate rises. The available evidence does not indicate how high-wage workers and low-wage workers differ in responding to changes in the wage rate.Explanation / Answer
Answer 47:
Option c. The income effect of a wage increase is expected to increase the demand for leisure.
Answer 48:
Option b. The substitution effect of a wage increase certainly leads all workers to want to work more.
Answer 49:
Option A. Substitution effect exceeds income effect for low income workers.
Answer 50:
Option A. Low income workers supply more labor as wage rate increases.
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