In a model of consumption and leisure, a drop in the wage will cause workers to work more if tastes are quasilinear in consumption.

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Quizplus · Accepted Answer

In a model with quasilinear preferences, a drop in the wage rate typically leads to a reduction in labor supply because the substitution effect is absent or weak, and the income effect dominates, leading individuals to prefer more leisure over work.

In a Model of Consumption and Leisure, a Drop in the Wage