64 740
Assignments Done
99,3%
Successfully Done
In September 2018

Answer to Question #60400 in Microeconomics for Bob

Question #60400
If leisure is a normal good, then the income effect of a decrease in wage will

a. decrease the number of hours worked.
b. increase the number of hours worked.
c. increase the number of leisure hours.
d. increase the sum of leisure plus hours worked.
Expert's answer
b. increase the number of hours worked.

If leisure is a normal good - the demand for it increases as income increases - an increase in income tends to make workers supply less labour (that is, hours worked) so they can "spend" the higher income on leisure. Conversely a decrease in income tends to to make workers supply more labour.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions