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Show via a mathematical derivation why an increase in dividend income leads to a fall in labor supply for preferences with continuously differentiable preferences with
Show via a mathematical derivation why an increase in dividend income leads to a fall in labor supply for preferences with continuously differentiable preferences with decreasining marginal utilities. How would this result change if leisure and consumption were perfect compliments? What does the answer to this question imply about the set of possible equilibrium prices that are capable of clearing the market? Be sure to define what it means to clear the market.
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