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Suppose then tax rate on labour income is increased. As a result of this tax change, the opportunity cost of leisure a) decreases. b) increases.

Suppose then tax rate on labour income is increased. As a result of this tax change, the opportunity cost of leisure

a) decreases.

b) increases.

c) is unaffected if the individual chooses not to work in the labour market.

d) is unaffected no matter how much the individual chooses to work.

e) may be affected but we cannot tell without knowing how much labour is supplied by a given individual.

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