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Name Please Print ECO361 LABOR ECONOMICS FIRST MIDTERM  Form

Name Please Print ECO361 LABOR ECONOMICS FIRST MIDTERM Form

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hello in this video I'm gonna talk about income and substitution effects of wage changes on labor supply so we're gonna start off with the idea that leisure is a good and it has a price and the price of leisure it's opportunity cost is the wage each hour spent not working not working represents an hour of lost wages if the price of leisure increases so if wage has increased the price of leisure increases people will buy less leisure and work more hours on the other hand if the price of leisure decreases and remember we're saying the wage is the price of leisure people will buy more leisure so if the price of leisure decreases wages fall people buy more leisure and work less hours we can also think of leisure as a normal good if income increases people will buy more normal goods so if Leisure's a normal good people will demand more leisure and that means they'll work fewer hours if income decreases and leisure is a normal good people will

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