If Leisure Is a Normal Good,how Will an Increase in the Wage

question 108

Multiple Choice

If leisure is a normal good,how will an increase in the wage rate affect an individual's desired quantity supplied of hours worked?

• A) It will increase, because the income and substitution effects work in the same direction for normal goods.
• B) It will increase, because the opportunity cost of leisure has increased.
• C) It may increase or decrease, depending on the relative magnitudes of the income and substitution effects.
• D) It will decrease because of the income effect.

Understand the structure and purpose of a T account.

Determine the normal balance of various account types.

Analyze the transaction to record it appropriately in the accounting system.

Understand the expanded basic accounting equation.

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Definitions:

Net Present Value

The difference between the current value of cash inflows and the current value of cash outflows over a period of time.

Investment

An asset or item acquired with the goal of generating income or appreciation.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used in capital budgeting to assess the profitability of investments.

Investment

The allocation of resources, such as capital or time, with the expectation of achieving a future return or profit.