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Section 13 Summary
14. A study by economists at the Federal Reserve Bank of Boston b.The study also finds an increase in female labor force
found that between 1965 and 2003 the average American’s participation—more women are choosing to hold jobs
leisure time increased by between 4 and 8 hours a week. The rather than exclusively perform household tasks. For the
study claims that this increase is primarily driven by a rise in average woman who has newly entered the labor force,
wage rates. which effect dominates?
a. Use the income and substitution effects to describe the c. Draw typical individual labor supply curves that illustrate
labor supply for the average American. Which effect your answers to part a and part b above.
dominates?
Summary 721
