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Question #47426

If leisure is a normal good, an increase in the wage ?

Options:

A) will always increase the quantity of labor supplied

B) will increase the amount of labor supplied if the substitution effect outweighs the income effect

C) will increase the amount of labor supplied if the income effect outweighs the substitution effect

D) will always decrease the amount of labor supplied

Answer: If leisure is a normal good, an increase in the wage will increase the amount of labor supplied if the substitution effect outweighs the income effect.

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