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The Substitution Effect of a Change in the Wage Rate

Question 33

Multiple Choice

The substitution effect of a change in the wage rate refers to _____


A) substituting leisure for work as the wage rate rises.
B) substituting market work for nonmarket work as the wage rate falls.
C) working more hours as the wage rate falls.
D) working fewer hours as the wage rate rises.
E) substituting market work for leisure or nonmarket work as the wage rate rises.

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