In the work-leisure model,suppose consumption and leisure are both normal goods.The income effect of a wage increase results in the worker choosing to
A) work less than before.
B) work more than before.
C) possibly work more or less than before.
D) work more than before with a higher level of consumption.

Question

Quizplus · Accepted Answer

When both consumption and leisure are normal goods, an increase in wages increases the worker's income, leading them to desire more leisure (since leisure is a normal good), thus working less.

In the Work-Leisure Model,suppose Consumption and Leisure Are Both Normal