André has asked his boss for a pay raise. His boss is concerned that if he increases André's salary, André might work less. In other words, André's boss is concerned that leisure is a normal good for André and that his:

Question

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If leisure is a normal good, an increase in income (from a pay raise) could lead André to consume more leisure, potentially working less. This implies that the income effect (desire for more leisure due to higher income) might be greater than the substitution effect (desire to work more due to higher wage rate).

André Has Asked His Boss for a Pay Raise