Question

If a worker chooses to work less when the wage rate rises, leisure is a(n) ___________.

Group of answer choices

1) normal good

2) Giffen good

3) ordinary good

4) inferior good

Answer 1

Ans. 1) Normal goods

If a worker chooses to work less when the wage rate rises, then the income of a worker increases, and due to the income effect, the demand for leisure increases. Therefore, it implies that leisure is a normal good for a worker as normal good and income have a positive relationship.

The demand for Inferior goods has a negative relationship with a change in income.

The quantity demand for ordinary goods has a negative relationship with the change in the price of the goods.

The quantity demand for Giffin goods has a positive relationship with the change in the price of the goods.