The demand curve for leisure will slope upward if leisure is a ______ good and the income effect of a wage change is relatively _______.
A) Normal; large
B) Inferior; large
C) Normal; small
D) Inferior; small

Question

Quizplus · Accepted Answer

Leisure is considered a normal good for most people, meaning they desire more of it as their income increases. If the income effect of a wage change is relatively large, it means that an increase in wages (and thus income) leads to a significant increase in the demand for leisure, causing the demand curve for leisure to slope upward as people are willing to "buy" more leisure time by working less.

The Demand Curve for Leisure Will Slope Upward If Leisure