Even though wages have increased substantially over the last two centuries, workers

now spend fewer hours working (and more hours in leisure) than ever before. Using

a diagram of the constrained optimisation model for a worker (and assuming there

has been no change in workers' time endowment), explain why increases in wages

over time have led to an increase in leisure hours (and a decrease in work hours). Of

the income and substitution effects, which is likely to have caused this change?