Asked by
Silvia Adauto
on Dec 01, 2024
Verified
If his wage rate increases, then a utility maximizing consumer will necessarily
A) increase (or leave constant) his labor supply.
B) increase (or leave constant) his labor supply if leisure is a normal good but otherwise might reduce his labor supply.
C) increase (or leave constant) his labor supply if leisure is an inferior good but otherwise might reduce his labor supply.
D) decrease (or leave constant) his labor supply.
E) none of the above.
Wage Rate
The amount of money paid to an employee per unit of time, often per hour or year.
Labor Supply
The total number of hours that workers are willing and able to work at a given wage rate.
Utility Maximizing
The economic principle that consumers will choose a combination of goods and services that maximize their overall satisfaction.
- Evaluate how changes in wages affect labor supply decisions.
Verified Answer
VW
Learning Objectives
- Evaluate how changes in wages affect labor supply decisions.
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