Economic theory predicts that an increase in wages
A)will cause a wage earner to work more.
B)will cause a wage earner to work less.
C)will cause a wage earner to be more productive.
D)might cause a wage earner to work more or work less.

Question

Quizplus · Accepted Answer

Economic theory suggests that an increase in wages can cause a wage earner to work more because the increased pay can act as an incentive to work longer or take on additional shifts. However, it can also cause a wage earner to work less if they now have more income and can afford to work fewer hours or take more time off. The impact on productivity will depend on the individual worker and the specific job they are performing.

Economic Theory Predicts That an Increase in Wages