Final answer:
The decision to work fewer hours after a raise is influenced by an individual's valuation of leisure versus income, refuting the assumption that higher wages always lead to increased working hours.
Step-by-step explanation:
Individuals can react differently to a wage increase, with some choosing to work fewer hours and enjoy more leisure time, while others may opt to maintain or increase their working hours to maximize income.
Vivian's scenario is an illustration of this dynamic, where after receiving a raise, she must decide whether to use the additional income to work less or not.
The situation underscores why it would be unwise to universally assume that a wage increase or income tax cut will lead to more hours worked. This choice is finely balanced between the prospects of earning more per hour and the value of personal leisure time.
The concept that some individuals may choose to work fewer hours after a wage increase reflects the leisure-income budget set, which highlights that people value both income and leisure time.
When it comes to tax cuts or government programs that affect income, there is a varied response among workers based on their personal preferences, financial needs, and the value they place on leisure relative to work.
The complete question is: Some people choose to work fewer hours after receiving a raise at work. Justify!