If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of
A. the substitution effect.
B. the income effect.
C. rational expectations.
D. rational ignorance.
Answer: B
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By definition, the labor force participation rate is
A) the percentage of institutionalized working-age individuals who are employed or seeking employment. B) the percentage of noninstitutionalized working-age individuals who are employed or seeking employment. C) the annual rate of growth in the number of people who are either employed or searching for available jobs. D) the annual rate of growth in the number of people who are unemployed and searching for available government-provided unemployment benefits.
Select the normative statement that completes the following sentence: If the minimum wage is raised:
a. cost per unit of output will rise. b. workers will gain their rightful share of total income. c. the rate of inflation will increase. d. profits will fall.