Asked by
Mpumelelo Pikini
on Nov 04, 2024
Verified
Related to the Economics in Practice on page 131: Uber drivers can choose to drive as many or as few hours as they desire, and most drivers have another job and drive for Uber as a way to supplement their income. Assuming leisure is a normal good, if Uber increased the wages it paid its drivers then the income effect would result in drivers working ________ and buying ________ leisure.
A) more; less
B) more; more
C) less; less
D) less; more
Income Effect
The change in an individual's or household's consumption resulting from a change in real income, influencing purchasing power.
Leisure
The time spent away from work and essential activities, where one is free to engage in activities of choice.
Uber
A multinational ride-hailing company that offers services including peer-to-peer ridesharing, ride service hailing, and a food delivery app.
- Perceive the interaction between earnings and labor supply, factoring in the effects of income and substitution.
- Familiarize oneself with the labor supply curve and how wage modifications affect it, bearing in mind the contribution of income and substitution effects.
Verified Answer
DW
Learning Objectives
- Perceive the interaction between earnings and labor supply, factoring in the effects of income and substitution.
- Familiarize oneself with the labor supply curve and how wage modifications affect it, bearing in mind the contribution of income and substitution effects.