Asked by anmol setia on Jul 28, 2024
Verified
Les is allowed to work only 8 hours a day at his main job, although he would like to work more hours.He takes a second job.He can work as many hours as he wishes at the second job, but at a lower wage.If leisure is a normal good, then an increase in the wage rate for his first job will reduce the number of hours he chooses to work at his second job.
Normal Good
A type of good for which demand increases as the income of individuals increases, holding everything else constant.
Wage Rate
The standard amount of compensation given to employees for services rendered, usually expressed per hour or year.
Second Job
An additional employment undertaken by an individual besides their primary job to earn extra income or explore a different field.
- Appraise the influence of wage modifications on the decision-making between labor and leisure, including the backward-bending supply of labor phenomenon.
- Understand how changes in wages and nonlabor income affect labor supply when leisure is considered a normal good.
Verified Answer
AT
Alyssa TrevinoJul 29, 2024
Final Answer :
True
Explanation :
As the wage rate for his first job increases, his opportunity cost of leisure increases. Therefore, he may choose to work fewer hours at both jobs, including the second job.
Learning Objectives
- Appraise the influence of wage modifications on the decision-making between labor and leisure, including the backward-bending supply of labor phenomenon.
- Understand how changes in wages and nonlabor income affect labor supply when leisure is considered a normal good.