Lisa Works 46 Hours a Week at a Wage of $10

question 74

Multiple Choice

Lisa works 46 hours a week at a wage of $10 an hour.If her wage increases to $16.50, then:

• A)the substitution effect implies that she will work less.
• B)if leisure is a normal good, the income effect implies that she will work less.
• C)if leisure is a normal good, the income effect will reinforce the substitution effect and she will work less.
• D)Lisa's marginal product of labor has decreased.