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Macroeconomics

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Labor-Leisure Decision, Increase in Wage

MACRO-K8ZET6

In a model where households face a labor-leisure decision (and where leisure and consumption are both income normal goods), an increase in the real wage will cause the household to unambiguously…

A

work more and consume more goods.

B

work less and consume more goods.

C

work more and consume fewer goods.

D

work less and consume fewer goods.

E

consume more goods with an ambiguous movement in work.

F

consume fewer goods with an ambiguous movement in work.

G

work more with an ambiguous movement in goods consumption.

H

work less with an ambiguous movement in goods consumption.