Because leisure is a normal good, an increase in income

Question

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An increase in income leads to an increase in the demand for leisure time as leisure is a normal good. With the rise in income, individuals seek to increase the time spent on leisure activities. Hence, the amount of time allocated to market work and non-market work reduces. Choice A is incorrect because an increase in income does not lead to a decrease in the demand for leisure time. Choice B is incorrect because an increase in income does not lead to a decrease in the demand for leisure time and hence cannot increase the time allocated to market work or non-market work. Choice D is incorrect because an increase in income leads to an increase in the demand for leisure time and not a decrease. Choice E is incorrect because leisure is a normal good and an increase in income will lead to an increase in demand for leisure time.

Because Leisure Is a Normal Good, an Increase in Income