When Consumption and Leisure Are Both Normal Goods, an Increase

question 49

Multiple Choice

When consumption and leisure are both normal goods, an increase in real dividend income minus taxation, the rational consumer

• A) increases consumption and increases labour supply.
• B) increases consumption and reduces labour supply.
• C) reduces consumption and increases labour supply.
• D) reduces consumption and reduces labour supply.
• E) increases consumption and savings.

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