In the work-leisure model,the income effect of a wage increase is when the worker chooses which option
A)She wishes to work less.
B)She wishes to work more.
C)She is indifferent between working more or less.
D)She wishes to work more but be less productive.

Question

Quizplus · Accepted Answer

The income effect of a wage increase suggests that as wages rise, the worker can maintain the same standard of living while working fewer hours, thus choosing to work less to enjoy more leisure time.

In the Work-Leisure Model,the Income Effect of a Wage Increase