Jenny's Hourly Wage Rate Was Increased from $17 to $21

question 71

Multiple Choice

Jenny's hourly wage rate was increased from $17 to $21. As a result of the wage increase, Jenny desires to work fewer hours and take more hours of leisure. For Jenny

• A) the income effect must be zero.
• B) the substitution effect dominates the income effect.
• C) the income effect dominates the substitution effect.
• D) the substitution effect must equal the income effect.

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A service that provides assistance to individuals in managing their debts, budgeting, and making financial decisions.