Penny's Wage Rate Decreases Because of the Imposition of a Payroll

Multiple Choice

Penny's wage rate decreases because of the imposition of a payroll tax, Penny decides to work fewer hours. This is an example of the:

A) induced savings effect.
B) income effect of a wage decrease.
C) substitution effect of a wage decrease.
D) reverse-endowment effect of a wage decrease.