The substitution effect in the labor supply decision refers to
a. substituting leisure for work as the wage rate rises
b. substituting market work for nonmarket work as the wage rate falls
c. working more hours as the wage rate falls
d. working fewer hours as the wage rate rises
e. substituting market work for leisure or nonmarket work as the wage rate rises
Question 2
Data show that the poorest U.S. demographic group is
a. the elderly because Social Security payments have not kept pace with inflation
b. the elderly because they have no steady income
c. the elderly because poverty increases with age
d. households headed by someone under 18 years of age
e. households headed by someone between 40 and 50 years old
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