Jian works as a delivery man and can work as many hours as he likes for $12 an hour. He typically works 40 hours a week. Recently, his pay has been cut. If Jian decides to work _______, this indicates that the _______ effect dominates his labor supply decision.

Question

Quizplus · Accepted Answer

If Jian works more hours after his pay cut, it indicates that the income effect dominates because he needs to work more to maintain his previous income level.

Jian Works as a Delivery Man and Can Work as Many