Meryl Works 10 Hours a Day in an Hourly Job

Multiple Choice

Meryl works 10 hours a day in an hourly job that pays $15 per hour.Suppose Meryl's wage rate increases to a really high rate of $10,000 per hour.Your friend argues that Meryl will supply more than 10 hours of work,because her wage rate is much higher.You argue than Meryl will supply less than 10 hours of work,because she can now afford the time off.Your friend is referring to the ________,and you are referring to the ________ of Meryl's wage increase.

A) substitution effect; income effect
B) leisure effect; wage effect
C) income effect; substitution effect
D) wage effect; leisure effect