When wages increase,if the substitution effect dominates,the quantity of labor supplied will increase.

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When wages increase, workers may decide to work more because the opportunity cost of leisure has become higher. This is known as the substitution effect, and it leads to an increase in the quantity of labor supplied. However, there is also an income effect, where workers may choose to work less because their higher wage means they can afford to work fewer hours and still maintain their desired standard of living. The overall impact on the quantity of labor supplied will depend on the relative strength of these two effects. If the substitution effect dominates, as the statement suggests, then the quantity of labor supplied will increase when wages increase.

When Wages Increase,if the Substitution Effect Dominates,the Quantity of Labor