The substitution effect occurs when wages rise because people tend to substitute more work in place of leisure.

Name: The substitution effect occurs when wages rise because people tend to substitute more work in place of leisure.
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The substitution effect refers to the economic principle that as wages increase, individuals are incentivized to work more (substitute work for leisure) because the opportunity cost of not working (i.e., leisure time) becomes higher.

The Substitution Effect Occurs When Wages Rise Because People Tend