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content area Part 1 Why might hours worked by the representative consumerLOADING... decrease when the real wageLOADING... increases? A. The income effect might dominate the
content area Part 1 Why might hours worked by the representative consumerLOADING... decrease when the real wageLOADING... increases? A. The income effect might dominate the substitution effect. With the income effect, the consumer will want to consume more leisure as it is now a normal good. B. The consumer will cut out consumer goods and spend all his or her extra wages on leisure. C. The substitution effect might dominate the income effect. With the substitution effect, leisure can be counted as a substitute good. D. An increase in the real wage causes consumption to increase, and therefore, the consumer will spend less time working and more time consuming goods
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