Use the Following to Answer Questions

question 6

Multiple Choice

Use the following to answer questions :
Figure: Davina's Labour Supply Choice
-(Figure: Davina's Labour Supply Choice) The figure Davina's Labour Supply Choice shows Davina's time allocation budget line when her hourly wage is $10 or $15 and she has 80 hours to allocate between labour and leisure;it also shows two of her indifference curves for income and leisure.As Davina's hourly wage rises from $10 to $15:

• A) the income effect is greater than the substitution effect.
• B) the substitution effect is greater than the income effect.
• C) the substitution effect is equal to the income effect.
• D) It is impossible to compare the income and substitution effect.

---

Definitions:

Stockholders

Individuals or entities that own shares in a corporation, granting them certain rights and potentially a share in the company’s profits.

Stock Dividends Distributable

A portion of a company's retained earnings that is allocated to be distributed to shareholders as additional shares of stock.

Equity Account

An account representing the owner's or shareholders' interest in a company, reflecting capital invested plus retained earnings minus withdrawals.

Shares "Owed"

Likely incorrect or a misunderstanding; potentially refers to shares that are borrowed and need to be returned in transactions such as short selling (NO real key term).