Q
If leisure is a normal good, an increase in the wage ?
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A
A. Will always increase the quantity of labor supplied
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B
B. Will increase the amount of labor supplied if the substitution effect outweighs the income effect
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C
C. Will increase the amount of labor supplied if the income effect outweighs the substitution effect
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D
D. Will always decrease the amount of labor supplied
Correct Answer:
B. B. Will increase the amount of labor supplied if the substitution effect outweighs the income effect