High-wage workers are
A)more likely than low-wage workers to supply more labor when the wage rate rises.
B)about as likely as low-wage workers to supply more labor when the wage rate rises.
C)less likely than low-wage workers to supply more labor when the wage rate rises.
D)about as likely as low-wages workers to supply less labor when the wage rate rises.

Question

Quizplus · Accepted Answer

High-wage workers are generally less likely than low-wage workers to supply more labor when the wage rate rises because they tend to have a higher income effect that outweighs the substitution effect. This means as their wage increases, they often prefer more leisure time over additional work, unlike low-wage workers who might need to work more to meet their financial needs.

High-Wage Workers Are