Sadie Works at a Factory for $15 an Hour and Typically

question 139

Multiple Choice

Sadie works at a factory for $15 an hour and typically works 40 hours a week.Sadie gets a pay raise and now earns $20 an hour.She decides to work 45 hours a week at $20 an hour.Her response to the pay increase demonstrates the:

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

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Definitions:

Income Distribution

The way in which a country's total economy's income is spread among its population.

Top Quintile

Refers to the top 20 percent segment in a distribution, such as income or wealth, denoting the highest earners or holders.

United States

A country in North America comprising 50 states, known for its significant impact on global politics, economy, and culture.

Quartile

A statistical term describing a division of a data set into four defined intervals based upon the values of the data and how they compare to the entire set.