Recent data has shown that income and volunteer time are positively related.Assuming that volunteer time is included in leisure time,what could explain this observation?
A) Higher income individuals view leisure as a normal good such that the income effect dominates the substitution effect.
B) Higher income individuals view leisure as a normal good such that the substitution effect dominates the income effect.
C) Higher income individuals view leisure as an inferior good such that the income and substitution effects both increase leisure time.
D) Both A and C.

Question

Quizplus · Accepted Answer

This observation can be explained by the fact that higher income individuals may have more control over their leisure time and are able to allocate more time towards volunteering activities. Furthermore, these individuals may view leisure time as a normal good, meaning that as their income increases, they are willing to spend more time on leisure activities such as volunteering. The income effect dominates the substitution effect in this scenario.

Recent Data Has Shown That Income and Volunteer Time Are