In regards to the quantity of labour supplied, what does the substitution effect indicate about the relationship between the wage rate and the opportunity cost of leisure?
A) At a higher wage rate, the opportunity cost of leisure decreases making leisure less expensive.
B) At a higher wage rate, the opportunity cost of leisure increases making leisure less expensive.
C) At a higher wage rate, the opportunity cost of leisure increases making leisure more expensive.
D) At a higher wage rate, the opportunity cost of leisure decreases making leisure more expensive.
Correct Answer:
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