The substitution effect is thought to dominate the behavior of low-wage workers.

Name: The substitution effect is thought to dominate the behavior of low-wage workers.
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Question

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The substitution effect refers to the phenomenon where individuals will choose to work more hours and earn more income in response to a decrease in the price of leisure. Low-wage workers are more likely to be sensitive to changes in wages and therefore are more likely to respond to the substitution effect.

The Substitution Effect Is Thought to Dominate the Behavior of Low-Wage