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The Substitution Effect in an Individual's Labor/leisure Choice Is That

Question 99

Multiple Choice

The substitution effect in an individual's labor/leisure choice is that


A) lower wages cause firms to operate less often.
B) a higher wage makes work less necessary, so less of it is done.
C) a higher wage makes work a more attractive alternative, so more work results.
D) work and leisure can be substituted for one another because they are generally mutually exclusive activities.
E) a lower wage makes leisure less attractive as an alternative, and less leisure is consumed.

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