When the wage increases, the substitution effect in the ...

[humphriesbr@me.com]

When the wage increases, the substitution effect in the household's choices leads to
 
  A) a decrease in consumption and leisure.
  B) a decrease in consumption and an increase in leisure.
  C) an increase in consumption and a decrease in leisure.
  D) an increase in consumption and leisure.

Question 2

According to Keynes, the consumption-income relationship is shown as C = a + bYD. Therefore, the saving-income relationship is
 
  a. S = a + (1  b)YD.
  b. S =  a + (1  b)YD.
  c. S = a + (1  b)/YD.
  d. S =  a + (1 b)/YD.

[adammoses97]

Answer to Question 1

C

Answer to Question 2

B

[humphriesbr@me.com]

Excellent

[jackie]

Thanks for the timely response, appreciate it