An increase in the wage rate means that the opportunity cost of leisure has fallen.

Name: An increase in the wage rate means that the opportunity cost of leisure has fallen.
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Question

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An increase in the wage rate means that the opportunity cost of leisure has risen because now, the worker can earn more income by working instead of taking leisure time. This means that the worker has to give up more leisure time if they choose to work, making leisure time more expensive in terms of foregone wages.

An Increase in the Wage Rate Means That the Opportunity