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According to the Substitution Effect, in Response to an Increase

Question 15

Multiple Choice

According to the substitution effect, in response to an increase in her wage, a person will


A) reduce hours worked because she wants to substitute leisure for work.
B) reduce hours worked because she wants to substitute work for leisure.
C) increase hours worked because leisure has become relatively more expensive than consumption.
D) increase hours worked because leisure has become relatively less expensive than consumption.
E) increase both consumption and hours of leisure.

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