Multiple Choice
Consider the indifference curve-budget line model of labor supply,and assume consumption and leisure are both normal goods.A higher wage rate would result in
A) more consumption and less leisure.
B) a reduction in the worker's marginal value of leisure.
C) reduced consumption if the income effect is larger than the substitution effect.
D) increased labor only if the substitution effect outweighs the income effect.
Correct Answer:
Verified
Correct Answer:
Verified
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