In the Neo-Classical Model of Labour Supply, Which of the Following

Multiple Choice

In the neo-classical model of labour supply, which of the following is always true?

A) If leisure is a normal good, a wage increase causes a decrease in hours worked.
B) If leisure is a normal good, a wage increase causes an increase in hours worked.
C) The substitution effect causes the worker to work more hours if wages increase.
D) The income effect causes the worker to work more hours if wage increase.
E) The income effect and the substitution effect work in the same direction.