Multiple Choice
If the wage rate falls, consumption
A) rises because the income and substitution effects are working in opposite directions to change consumption.
B) falls because the income and substitution effects are both working in the same direction to decrease consumption.
C) rises because the income and substitution effects are both working in the same direction to increase consumption.
D) falls because the income and substitution effects are working in opposite directions to change consumption.
Correct Answer:
Verified
Correct Answer:
Verified
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