Caroline's Hourly Wage Rate Was Reduced from $22 to $16

Multiple Choice

Caroline's hourly wage rate was reduced from $22 to $16. As a result of the wage decrease, Caroline desires to work more hours and take fewer hours of leisure. For Caroline

A) the income effect must be zero.
B) the substitution effect dominates the income effect.
C) the income effect dominates the substitution effect.
D) the substitution effect must equal the income effect.