If leisure is a normal good, an increase in the wage?

3311EconomicsMedium

Awill always increase the quantity of labor supplied

Bwill increase the amount of labor supplied if the income effect outweighs the substitution effect

Cwill increase the amount of labor supplied if the substitution effect outweighs the income effect

Dwill always decrease the amount of labor supplied

Correct answer

C. will increase the amount of labor supplied if the substitution effect outweighs the income effect

Explanation

The correct answer is will increase the amount of labor supplied if the substitution effect outweighs the income effect.

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