Day: May 4, 2023

A worker responds to an increase in his hourly wage rate by reducing the number of hours he works per week.

What would explain this?

Select ONE answer:

1. The income effect of the wage rate increase outweighs the substitution effect.
2. The opportunity cost of leisure has increased.
3. The worker prefers leisure to work.
4. The worker’s supply of labour is wage inelastic.

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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