The Average Work Week in the United States Has Declined

question 148

Multiple Choice

The average work week in the United States has declined to fewer than 40 hours even though wage rates have been increasing. The best explanation for this phenomenon is that:​

• A)the labor supply curve shifted to the right.
• B)the labor demand curve shifted to the right.
• C)the income effect of rising wages outweighed the substitution effect.
• D)the substitution effect of rising wages outweighed the income effect.
• E)the labor supply curve is linear and upward slopping.

---

Definitions:

Binding Price Ceiling

A legal maximum price for a good or service that is set below the equilibrium price, resulting in shortages.

Equilibrium Price

The market price at which the quantity of a good demanded equals the quantity supplied, leading to market stability.

Surplus

An excess of supply over demand in a market, typically resulting in lower prices.

Price Ceiling

A legally established maximum price that can be charged for a good or service.