The Intertemporal Substitution Hypothesis Suggests That Hours of Work Should

question 7

Multiple Choice

The intertemporal substitution hypothesis suggests that hours of work should

• A) be greatest during peak wage years.
• B) steadily increase with age.
• C) steadily decrease with age.
• D) be greater for women than for men.
• E) increase immediately prior to retirement.

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Definitions:

Marginal Revenue Product

Marginal revenue product is the additional revenue generated from the use of one more unit of a variable input, holding other inputs constant.

Productive

The ability to produce a substantial amount of goods or services, or doing so efficiently.

Wage Differentials

Wage differentials are the variations in wage rates due to the differences in occupation, industry, geographic location, or within a company, among other factors.

College Graduates

People who have finished their studies and earned a degree from a higher education institution.