6. If we assume that leisure is a normal good, then the income effect associated with...

 

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6. If we assume that leisure is a normal good, then the income effect associated with a wage increase will always result in (a) an increase in the hours of work. (b) a decrease in the hours of work. (c) an increase in the hours of work only if the substitution effect is negligible. (d) an indeterminate response as the worker needs additional market information. 7. The derived demand for labour by a competitive firm is derived from the firm's need to (a) determine the labour input consistent with maximising total output. (b) determine the labour input consistent with producing the profit maximising output. (c) minimise the total wage bill associated with its labour input. (d) determine the labour input consistent with maximising the total revenue from the sale of the firm's output. 6. If we assume that leisure is a normal good, then the income effect associated with a wage increase will always result in (a) an increase in the hours of work. (b) a decrease in the hours of work. (c) an increase in the hours of work only if the substitution effect is negligible. (d) an indeterminate response as the worker needs additional market information. 7. The derived demand for labour by a competitive firm is derived from the firm's need to (a) determine the labour input consistent with maximising total output. (b) determine the labour input consistent with producing the profit maximising output. (c) minimise the total wage bill associated with its labour input. (d) determine the labour input consistent with maximising the total revenue from the sale of the firm's output.

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6 The correct answer is b a decrease in the hours of work If we assume leisure is a normal good then ... View the full answer