When leisure is a normal good, the income effect from an increase in wages is manifest in a(n):
A)desire to consume more leisure
B)desire to consume less leisure
C)upward-sloping labour supply curve
D)shift in labour demand

Question

Quizplus · Accepted Answer

When leisure is a normal good, an increase in wages leads to an increase in income, which in turn leads to an increase in the demand for leisure. Thus, the desire to consume more leisure is manifested as a result of the income effect.

When Leisure Is a Normal Good, the Income Effect from an Increase