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6. Alex receives a raise at work and continues to work the same number of hours each week. How will his demand for an inferior good change?

A. It will increase.
B. It will fluctuate erratically.
C. It will decrease.
D. It will stay the same.



Answer :

GinnyAnswer

Final answer:

When a worker receives a raise, the impact on working hours depends on the income and substitution effects interaction.


Explanation:

The effect of a wage increase on hours worked is dependent on the income and substitution effects. When a worker like Alex receives a raise at work, the income effect may lead to a decrease in the quantity of labor supplied due to the increased purchasing power. Meanwhile, the substitution effect may induce the worker to supply more labor, resulting in a complex interplay between working hours and wages.


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