If a worker's wage rate rises:
A)household production will shift away from goods-intensive commodities towards time-intensive commodities
B)household production will shift away from time-intensive commodities towards goods-intensive commodities
C)more leisure time will be consumed
D)more leisure time will be consumed if the substitution effect outweighs the income effect

Question

Quizplus · Accepted Answer

When a worker's wage rate rises, the opportunity cost of time increases, leading households to substitute away from time-intensive commodities towards goods-intensive commodities.

If a Worker's Wage Rate Rises