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Suppose there is an increase in hourly wages. Describe how this change could affect labor supply responses at (i) the extensive margin and (ii) the
Suppose there is an increase in hourly wages. Describe how this change could affect labor supply responses at (i) the extensive margin and (ii) the intensive margin. Note: Try to be as comprehensive as possible with your explanation. Hint: In your explanation, utilize concepts such as "substitution effect" and "income effect." Furthermore, describe how your explanation would depend on whether leisure is assumed to be a normal good versus an inferior goo
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