Julie works at a local hat factory for $12 an hour and typically works 40 hours a week. The company threatens layoffs, so Julie and the others agree to a pay cut. Julie now earns $10 an hour and works every hour over 40 that her boss will let her. Julie's response to this pay cut was to work:
A. more, demonstrating a dominant income effect.
B. less, demonstrating a dominant price effect.
C. more, demonstrating a dominant price effect.
D. less, demonstrating a dominant income effect.
Answer: A
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