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If a Large Increase in the Wage Rate Leads to a Net

Question 28

Multiple Choice

If a large increase in the wage rate leads to a net increase in the use of land by a firm,then


A) the substitution effect outweighed the output effect.
B) the output effect outweighed the substitution effect.
C) the substitution and output effects are equal.
D) there is no way to estimate the relative sizes of the substitution and output effects.

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