Figure 14.1.4
A consumer's original utility maximizing combination of income and leisure is shown in the diagram above as point A. After a wage decrease, the consumer's utility maximizing combination changes to point C.
-Refer to Figure 14.1.4 above. The income effect of the wage decrease on the amount of hours of leisure is:

Question

Quizplus · Accepted Answer

Without access to Figure 14.1.4 or specific details about the shifts in leisure and labor supply, it's impossible to accurately determine the income effect of a wage decrease on hours of leisure. The correct answer would depend on visual or descriptive information about how the wage decrease affects the individual's budget constraint and utility maximization, which is not provided here.

Figure 14.1.4 A Consumer's Original Utility Maximizing Combination of Income and Leisure