Figure 12.4 -Refer to Figure 12.4.Which of the Following Is True If

Multiple Choice

Figure 12.4
-Refer to Figure 12.4.Which of the following is true if the wage rate increases from W₁ to W₂?

A) The income effect is larger than the substitution effect.
B) The substitution effect is larger than the income effect.
C) The income effect and the substitution effect are equal.
D) The supply curve is unit-elastic.