The substitution effect in the work-leisure model induces a person to work less in response to higher wages, which tends to make the labor-supply curve slope upward.

Question

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The substitution effect in the work-leisure model actually induces a person to work more in response to higher wages, as the opportunity cost of leisure increases, making work relatively more attractive. This effect contributes to the upward slope of the labor-supply curve.

The Substitution Effect in the Work-Leisure Model Induces a Person