When Is the Substitution Effect of a Wage Increase Observed

question 210

Multiple Choice

When is the substitution effect of a wage increase observed?

• A)The higher wage income causes workers to take more leisure and work less.
• B)Leisure's higher opportunity cost causes workers to take less leisure and work more.
• C)The higher wage income causes workers to take more leisure and work more.
• D)Leisure's higher opportunity cost causes workers to take more leisure and work less.

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