Which the following statement is correct for a typical worker? a) Both the income and substitution effects of a higher wage encourage more work. b) The substitution effect of a higher wage encourages less work, and the income effect encourages more work. c) The substitution effect of a higher wage encourages more work, and the income effect encourages less work. O d) Both the income and substitution effects of a higher wage encourage less work.

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Q: What is the marginal rate of substitution at point A? Interpret this value.

A: Formula used: MRSXY = dYdX = MUxMUy

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