If the income effect is smaller than the substitution effect, higher net wages will

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When the substitution effect (the tendency to substitute leisure with labor when wages increase, making work relatively more attractive) outweighs the income effect (the tendency to enjoy more leisure as income increases, reducing the need to work), higher net wages will lead to an increase in the supply of labor. This is because individuals are more incentivized to work more hours due to the higher wages, substituting leisure time for work.

If the Income Effect Is Smaller Than the Substitution Effect