You have recently earned an hourly pay raise. As your wages increase, the opportunity cost of going to the beach rather than working:
A. decreases.
B. stays the same.
C. is limited by the income effect.
D. increases.
It all depends. If you’re going to buy drinks and tons of bathing suits then it decreases. But if you plan on going to beach just to get a tan then it’ll increase. But than again if you choose to go to the beach instead of working then it would be C
