An Increase in the Wage Rate When the Substitution Effect

question 15

Multiple Choice

An increase in the wage rate when the substitution effect dominates will ________ labor force participation and ________ hours of work (of those working before and after the wage increase) .

• A) increase; increase
• B) increase; decrease
• C) decrease; decrease
• D) decrease; increase

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Definitions:

Younger Workers

Individuals in the workforce who are typically classified by a younger age range, often new entrants or those in the early stages of their careers.

EEOC

The Equal Employment Opportunity Commission is a federal agency tasked with enforcing legislation that prohibits discrimination in the workplace.

Legal Actions

The process of pursuing or defending rights through formal legal procedures, including litigation in court.

Payroll Taxes

Taxes imposed on employers and employees, used to fund social security, Medicare, and other government programs.