Question: Suppose leisure is an inferior good for a worker Set

Suppose leisure is an inferior good for a worker. Set up this worker's indifference curves for money income and leisure, and derive the income and substitution effects of a tax-induced wage decline. Derive the compensated labor supply curve for this worker, and explain how it differs from the compensated supply curve of a worker for whom leisure is a normal good.

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  • CreatedAugust 22, 2015
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