Daniel had been earning $67 per hour and working 45 hours per week. Then Daniel's wage changes to $77 per hour, and as a result, he now works 40 hours per week. What can we conclude from this information about the income effect and the substitution effect of a wage change for Daniel?

Question

Vaughn Key

Business

2 May, 02:52

Daniel had been earning $67 per hour and working 45 hours per week. Then Daniel's wage changes to $77 per hour, and as a result, he now works 40 hours per week. What can we conclude from this information about the income effect and the substitution effect of a wage change for Daniel?

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Answers (1)

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Beatrice · Answer 1

We can conclude from this information about the income effect and substitution effect of a wage for Daniel is that before he earned 67$ per hour and was working 45 hours a week and then he changed to 77$ an hour and started working 40 hours a week. So with that being said that he makes more money now that he changed to 77$ an hour for 40 hours a week

Explanation:

Because if you do Multiply 65$ X-times 45hourly. You get 2,600. But if you multiply 77$ X-times 40hourly. You get 3,080