Recent data has shown that income and volunteer time are ...

[jessicacav]

Recent data has shown that income and volunteer time are positively related. Assuming that volunteer time is included in leisure time, what could explain this observation?
 
  A) Higher income individuals view leisure as a normal good such that the income effect dominates the substitution effect.
  B) Higher income individuals view leisure as a normal good such that the substitution effect dominates the income effect.
  C) Higher income individuals view leisure as an inferior good such that the income and substitution effects both increase leisure time.
  D) Both A and C.

Question 2

Wealthy people will tend to have vertical labor supply curves
 
  A) only if their income effect just offsets their substitution effect.
  B) only if their income effect is greater than their substitution effect.
  C) only if their income effect is less than their substitution effect.
  D) only if they don't have an income effect.

[dawsa925]

Answer to Question 1

A

Answer to Question 2

A