Question

True, False or Uncertain: Explain

If spouses are complements in consumption of household commodities, then a wife’s choosing to increase her leisure time will cause her husband’s leisure time

to decrease.

Answer 1

The statement is False

• Complementary goods are those goods whose demand decreases with the rise in price of another good and increases with the fall in price of another good.
• As the relationship between them is inverse and negative, they are said to have a negative cross elasticity of demand.
• Here in this question, it is given that the spouses are complements in the consumption of household commodities.
• As they are complements , increase in the leisure time of wife will only cause her husband's leisure time to increase. But if they were substitutes, increase in one's leisure time would have decreased others leisure time.