If Leisure Is a Normal Good, Then the Income Effect

question 26

Multiple Choice

If leisure is a normal good, then the income effect of a decrease in wage will:

• A) decrease the number of hours worked.
• B) increase the number of hours worked.
• C) decrease the number of leisure hours.
• D) increase the sum of leisure plus hours worked.

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Definitions:

Triangular Trade

A historical term that describes a system of trading in which a country pays for its imports from one country by its exports to another, often involving the exchange of slaves, goods, and raw materials between the Americas, Europe, and Africa.

Economic Impact

The effect of an event, policy, or business activity on the economy of a region or country, including factors like job creation, GDP growth, or market fluctuations.

New England

A region in the northeastern United States comprising six states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont), known for its colonial history and distinct seasonal climates.

Anglo-American Elites

Individuals of English descent who hold significant economic, political, or social power in the United States.