If an increase in the wage rate from $6.00 per hour to $6.50 per hour causes a worker to decrease his hours worked from 40 to 35 hours per week,which effect dominates?

Question

Quizplus · Accepted Answer

The income effect dominates in this scenario because the worker chooses to work fewer hours as their wage increases, suggesting they feel wealthier and thus decide to enjoy more leisure time instead of working more hours.

If an Increase in the Wage Rate from $6