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:

Proportion

A part, share, or number considered in comparative relation to a whole.

Sales

Income received from selling goods or services over a period of time.

Direct Expenses

Costs that can be directly traced to a specific cost object, such as a product, department, or project.

Joint Benefit

The advantages or profits derived from a venture, project, or activity that are shared by all participating parties.