The Case in Point on Airline Pilots indicated that a decreased wage for some pilots resulted in:
A) a decreased quantity of labor supplied because the substitution effect was the only relevant factor in this situation.
B) an increased quantity of labor supplied because the substitution effect was the only relevant factor in this situation.
C) a decreased quantity of labor supplied because the substitution effect dominated the income effect.
D) an increased quantity of labor supplied because the income effect dominated the substitution effect.

Question

Quizplus · Accepted Answer

When wages decrease, the income effect can lead to pilots working more hours to maintain their income level, thus increasing the quantity of labor supplied despite lower wages.

The Case in Point on Airline Pilots Indicated That a Decreased