Draw the indifference curve for someone decidinghow to allocate time between work and leisure.Suppose the wage increases. Is it possible that theperson’s consumption would fall? Is this plausible?Discuss. (Hint: Think about income and substitutioneffects.)
Draw the indifference curve for someone decidinghow to allocate time between work and leisure.Suppose the wage increases. Is it possible that theperson’s consumption would fall? Is this plausible?Discuss. (Hint: Think about income and substitutioneffects.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Draw the indifference curve for someone deciding
how to allocate time between work and leisure.
Suppose the wage increases. Is it possible that the
person’s consumption would fall? Is this plausible?
Discuss. (Hint: Think about income and substitution
effects.)
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