An increase in one's non- labour income:
A)shifts the income- leisure budget constraint up in a parallel fashion.
B)shifts the income budget constraint up in a parallel fashion.
C)does not affect he income- leisure budget constraint.
D)shifts the time constraint up in a parallel fashion.

Question

Quizplus · Accepted Answer

Non-labor income is any form of income that does not come from work, such as investment income or inheritance. An increase in non-labor income shifts the budget constraint up, meaning the person has more money to spend on both leisure and consumption goods. This increase in income allows the person to have more leisure time without sacrificing their consumption level, thus shifting the income-leisure budget constraint up in a parallel fashion.

An Increase in One's Non- Labour Income