When consumption and leisure are both normal goods, after an ...

[mcmcdaniel]

When consumption and leisure are both normal goods, after an increase in real dividend income minus taxation, the rational consumer
 
  A) increases consumption and increases leisure.
  B) increases consumption and reduces leisure.
  C) reduces consumption and increases leisure.
  D) reduces consumption and reduces leisure.

Question 2

The condition, MRS1,'C' = w ', describes the representative consumer's
 
  A) investment decision.
  B) consumption - savings decision.
  C) current period work - leisure decision.
  D) future period work - leisure decision.

[Joy Chen]

Answer to Question 1

A

Answer to Question 2

D

[mcmcdaniel]

Excellent

[brbarasa]

TYSM