Andre Cummings, the production manager of Electric Designs, has asked his boss for a pay raise.His boss is concerned that if he increases Andre's salary, Andre might work less.In other words, Andre's boss is concerned that leisure is a normal good for Andre and that his:
A) income and substitution effects might move in the same
B) direction.income effect might be greater than his substitution effect.
C) substitution effect might be greater than his income effect.
D) income and substitution effects might cancel out to zero.
Correct Answer:
Verified
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