If his wage rate increases, then a utility maximizing consumer will necessarily
A)increase (or leave constant)his labor supply.
B)increase (or leave constant)his labor supply if leisure is a normal good but otherwise might reduce his labor supply.
C)increase (or leave constant)his labor supply if leisure is an inferior good but otherwise might reduce his labor supply.
D)decrease (or leave constant)his labor supply.
E)none of the above.

Question

Quizplus · Accepted Answer

If leisure is an inferior good, an increase in wage rate may lead the consumer to work more as they substitute leisure with work, increasing labor supply.

If His Wage Rate Increases, Then a Utility Maximizing Consumer