If leisure is a normal good,how will an increase in the wage rate affect an individual's desired quantity supplied of hours worked?
A) It will increase, because the income and substitution effects work in the same direction for normal goods.
B) It will increase, because the opportunity cost of leisure has increased.
C) It may increase or decrease, depending on the relative magnitudes of the income and substitution effects.
D) It will decrease because of the income effect.
Correct Answer:
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