Question: when wage decrease, working hour decrease/ leisure increase, is that income effect or substitution effect?

when wage decrease, working hour decrease/ leisure increase, is that income effect or substitution effect?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

3 Optimization [2.5 points] Sam is taking a new job and must decide how many hours they'd like to work. Assume that Sam gets enjoyment from two things: consumption goods 0 and hours of leisure 6....

Q:

Which of the following expressions illustrates the point that lifetime consumption (over a two-period framework) should equal lifetime earnings? Assume that the rate of interest is zero. C denotes...

Q:

content area Part 1 Why might hours worked by the representative consumerLOADING... decrease when the real wageLOADING... increases? A. The income effect might dominate the substitution effect. With...

Q:

In economics terms, the equilibrium (D) can be described as that point such that That is one works up until the point that the marginal disutility of work exceeds the utility gain of extra wages. In...

Q:

QUESTION 1 If, for any given amount of a good or service, willingness to pay increases, then: A. supply has increased. B. supply has decreased. C. demand has increased. D. demand has decreased....

Q:

Barry's wage increased and he responded by working more hours. Which statement must be TRUE? a . The substitution effect of the wage increase dominated the income effect. b . Leisure is an inferior...

Q:

1. According to the text, as compared to rich countries, most of the poor countries do not fare well because: a. they have no oil. b. the people in these countries have limited property rights. c....

Q:

1. According to the text, as compared to rich countries, most of the poor countries do not fare well because: a. they have no oil. b. the people in these countries have limited property rights. c....

Q:

Question 1 2 of 7 5 ( Table ) Based on the table, what must be true about the labor supply curve as the wage rate rises from \ ( \ $ 5 0 \ ) to \ ( \ $ 6 0 \ ) per hour? \ begin { tabular } { | l | l...

Q:

A. 2. When the price of a good decreases, and an individual's consumption of that good also decreases, it is most likely that the: A. income effect and substitution effect are both negative. B....

Q:

Light polarized in the x -direction shines through two polarizing sheets. The first sheet's transmission axis makes an angle with the x-axis and the transmission axis of the second is parallel to...

Q:

According to the Standards, due professional care calls for: a. Detailed audits of all transactions related to a particular function. b. Infallibility and extraordinary performance when the system of...

Q:

For a continues variable x with probability function fx what is expected value of x

Q:

Kevin lives in Calgary and wants to buy a 2013 Tesla Model S electric vehicle. The best price he can find for a low-mileage model in Alberta is $95,000. (No GST would be pay-able on this private...

Q:

Three tension rods are bolted to a gusset plate (Figure P4.6, see on page 170). Determine the magnitude and direction of their resultant. Use the (a) Vector algebra and (b) Vector polygon methods....

Q:

Sara, a recent graduate, accepts a position at a small engineering design firm. Her new colleagues form a tightly knit, congenial group, and she often joins them for get togethers after work. Several...

Q:

Illustrate all the steps of the adaptable priority queue call replaceKey(e, 18) for entry e storing (5, A) in the heap of Figure 9.1. (4,C) (5,A) (6,Z) (15,) (9,F) (7,Q) (20,B) (16,X) (25,J) (14,E)...

Q:

Hudson Signs, Inc., needs funds, and Alley Hudson, the president, has asked you to consider investing in the business. Answer the following questions about the different ways that Hudson might...

Q:

Among a group of 5 8 programmers, who know either Java or Python or both, 1 5 only know Java and 1 3 only know Python. What is the probability of randomly choosing a programmer who knows both...

Q:

3. How can we use information and communication to generate trust?

Q:

4. How can we use information and communication to influence other people?

Q:

2. Why do we have more confidence in what one person tells us than in what another person tells us?