What is the substitution effect for leisure demand?
What will be an ideal response?
The change in leisure resulting from a change in the wage rate compared to the price of other goods. When the price of leisure increases (because wages increased) the quantity of leisure demanded will fall relative to the quantity demanded of goods whose prices have not risen.
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In the United States from 1949 to 2010, the vast majority of economic growth has been a result of the contribution from
A) capital. B) labor. C) total factor productivity. D) Capital, labor, and total factor productivity have contributed about equally to economic growth.
An increase in the level of prices of goods and services will do what to the long-run aggregate supply curve?
A. make the curve flat B. shift it to the right C. shift it to the left D. a movement along the curve
The asset market approach seeks to explain exchange rates by focusing on the demand and supply of national moneys.
Answer the following statement true (T) or false (F)
One implication of coupling the rational expectations hypothesis with the assumption of flexible wages and prices is that
A. contractionary monetary policy will be effective in combating inflation. B. only predictable policy actions by the Fed will have an effect on the real economy. C. expansionary monetary policy will be effective in combating recessions. D. only unpredictable policy actions by the Fed will have an effect on the real economy.