Workers May Display Irrationality in Labor Adjustments to Shocks If

question 159

Multiple Choice

Workers may display irrationality in labor adjustments to shocks if:

• A) union actions caused their pre-layoff wages to exceed market clearing wages.
• B) they practice intertemporal substitution.
• C) they voluntarily quit their jobs.
• D) they find new jobs that are higher paying.

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Definitions:

Industry

A group of companies or businesses that produce similar goods or services and compete within the same market.

Correction

A term often used in finance and economics, indicating a short-term decline in the price of assets or the broader market to adjust for overvaluation.

Emissions Abatement

The process of reducing emissions of pollutants into the environment, typically achieved through policies, technologies, or practices that decrease the emission of harmful gases.

Marginal Cost

Cost of one additional unit of a good.