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Figure 3.11 - The Effect of Additional Income on the Choice of Free Time and Consumption

Figure 3.11 illustrates how additional, non-labor income affects an individual's optimal choice between free time and consumption. The figure shows that receiving a gift causes a parallel upward shift in the budget constraint. This expands the feasible set and typically leads the individual to choose more free time (working fewer days), as they can afford more leisure while maintaining or increasing consumption.

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Updated 2026-05-02

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Introduction to Microeconomics Course

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