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If the Hourly Wage Increases from $8 to $10 an Hour

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If the hourly wage increases from $8 to $10 an hour and in response Jim increases the number of hours that he works from 44 to 46,the income effect is dominant.

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Definitions:

Bureau of Labor Statistics

A U.S. government agency responsible for collecting and analyzing labor economics and statistical data.

Discouraged Workers

Individuals not actively searching for employment due to believing no jobs are available for them.

Labor Force

The total number of people employed or actively seeking employment in a particular country or region.

Unemployed

Refers to individuals who are capable of working, actively seeking work, but unable to find a job.

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