A study by economists at the Federal Reserve Bank of Boston found that between 1965

and 2003 the average American's leisure time increased by between 4 and 8 hours a

week. The study claims that this increase is primarily driven by a rise in wage rates.

Use the income and substitution effects to describe the labor supply for the

average American. Which effect dominates?

Draw a typical individual labor supply curve that illustrates your answer from

part a.