Assume Leisure Is an Inferior Good Instead of a Normal

question 150

Multiple Choice

Assume leisure is an inferior good instead of a normal good. The income effect of a wage increase will lead to a ________ demand for leisure and a ________ labor supply.

• A) higher; higher
• B) higher; lower
• C) lower; higher
• D) lower; lower

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Definitions:

FOB Shipping Point

A term used in shipping contracts to indicate that a buyer must pay for the shipping costs and is responsible for the goods once they leave the seller's premises.

FOB Destination

FOB Destination is a shipping term indicating that the seller retains ownership and liability of goods until they are delivered to the buyer's specified location, at which point the buyer assumes responsibility.

Title Passage

The point in time when the ownership (title) of goods passes from seller to buyer as per the terms of the sales contract.

Perpetual Inventory System

An accounting method that records goods transactions immediately through the use of computer systems, providing a continuous balance of inventory.