Related to the Economics in Practice on page 131: Uber drivers can choose to drive as many or as few hours as they desire, and most drivers have another job and drive for Uber as a way to supplement their income. Assuming leisure is a normal good, if Uber increased the wages it paid its drivers then the substitution effect would result in drivers working ________ and buying ________ leisure.
A) more; less
B) more; more
C) less; less
D) less; more

Question

Quizplus · Accepted Answer

The substitution effect implies that as wages increase, work becomes more attractive relative to leisure, leading drivers to work more (substituting leisure for work) and thus buy less leisure.

Related to the Economics in Practice on Page 131: Uber