Louise works 46 hours a week at $12 an hour. If her wage increases to $18.50:
A) the substitution effect implies that she will work less.
B) if leisure is a normal good, the income effect implies that she will work less.
C) if leisure is a normal good, the income effect will reinforce the substitution effect, and she will work less.
D) her marginal product of labor has decreased.
Correct Answer:
Verified
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