Dhriti Works at a Local Factory for $12 an Hour

question 132

Multiple Choice

Dhriti works at a local factory for $12 an hour and typically works 40 hours a week. The company threatens layoffs, so Dhriti and the other employees agree to a pay cut. Dhriti now earns $10 an hour and works every hour over 40 that her boss will let her. Because Dhriti's response to this pay cut was to work more, there is a dominant:

• A)income effect.
• B)price effect.
• C)substitution effect.
• D)labor effect.

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Definitions:

Production Time

The total time required to manufacture a product, including all processing, labor, and machine time.

Make-To-Order

A manufacturing strategy where production starts only after an order is received, tailoring products to specific customer demand.

Finishing Department

The final stage in a manufacturing process where products undergo final touches, treatments, or packaging before being ready for sale.

Net Profit

The financial gain or loss a business makes after subtracting all expenses, taxes, and costs from total revenue.