Question

When leisure is a normal good, the income effect from a decrease in wages is evident...

When leisure is a normal good, the income effect from a decrease in wages is evident in

a.

a desire to consume more leisure.

b.

a desire to consume less leisure.

c.

an upward-sloping labor-supply curve.

d.

a shift in labor demand.

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Answer #1

Consider the case of a normal good where in the case of normal good of income decreases, then the production possibility Frontier will move towards less consumption or leftwards since leisure is a normal good people get to consume less leisure if the wages actually decrease on the whole and therefore

(B) desire to consume less leisure is the answer

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