- 8 When The Wage Rate Increases The Income Effect Says That A Person Should A Work Fewer Hours B Work More Hours C W 1 (270.44 KiB) Viewed 33 times
8. When the wage rate increases, the income effect says that a person should a. Work fewer hours b. Work more hours c. Work the same hours. d. Have a horizontal labor supply curve e. Work more, fewer, or the same hours depending on how high is the wage. 9. A worker earns $20 hourly wage and has 100 hours per week to allocate between work hours and leisure hours. The workers pays no tax on hourly earnings for the first 10 hours worked, pays 20 percent tax on earnings for hours worked between 10 and 40 hours, and pays 50 percent tax on earnings for hours beyond 40 hours. What is the opportunity cost of an additional hour of leisure for a worker who works 12 hours per week? Write in the numeric value (no dollar signs or decimals). a