Multiple Choice
When Ronald's hourly wage increased from $12 to $15, this allowed him to reduce the number of hours worked so that he can spend more time studying. What is TRUE about Ronald's individual labor supply at this point?
A) His substitution effect is stronger than his income effect.
B) His income effect is stronger than his substitution effect.
C) His substitution effect is equal to his income effect.
D) His substitution effect and income effect are both nonexistent.
Correct Answer:
Verified
Correct Answer:
Verified
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