Real wages usually lag behind the increases in labor productivity.

Consider the following simple regression model y = ?0 + ?1x1 + u. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the IV estimator has a(n) _____.?

A. ?downward bias B. ?asymptotic bias C. ?upward bias D. ?substantial bias

Kip will work fewer hours if his salary increases. For Kip, the ________ effect must outweigh the ________ effect.

A. substitution; income B. income; utility C. income; substitution D. utility; substitution