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Sonia works 30 hours per week at a gift shop. her hourly wage is increased from $10 to $12 and she is offered the option of increasing her total work hours. Given that leisure is a normal good for Sonia, she will choose to increase the number of hours she works only if:

A. the income effect of the wage change outweighs the substitution effect of the wage change.
B. the substitution effect of the wage change outweighs the income effect of the wage change.
C. her labor supply curve is downward-sloping
D. she views $12 an hour as an efficient wage

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 Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019
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