Question
13. In the period before 1870, in Britain both wages and hours worked rose, while in the 20th century, working hours fell even though wages
13. In the period before 1870, in Britain both wages and hours worked rose, while in the 20th century, working hours fell even though wages continued to rise. Based on this information, which of the following statements is correct?
A. In the period before 1870, the positive substitution and income effects of rising wages led to workers taking less free time.
B. From the pre-1870s to the 20th century, the substitution effect of a rise in the wage rate on the hours of free time changed from negative to positive.
C. In the 20th century, the substitution effect dominated the income effect, so that hours of free time rose.
D. The marginal rate of transformation between consumption and free time rose from the pre-1870s to the 20th century.
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