Over the past fifty years the average American’ leisure time has increased by between 4 and 8 hours a week. Some economists think that this increase is primarily driven by a rise in wage rates.

a. Use the income and substitution effects to describe the labor supply for the average American. Which effect dominates?

b. Maddition to increasing wages, a study by the Bureau of Labor Statistics finds labor force participation for women is projected to steadily increase through 2024. For the average woman who has entered the labor force, which effect dominates?

c. Draw typical individual labor supply curves that illustrate your answers to part aand part b above.