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Consider the following two statements on individual labor supply decisions in a perfect labor market: (1) If the choice of hours of work is restricted the reservation wage goes up.(2) The reservation wage separates employment from unemployment. What can you say about these two statements? Question 8Answer a. Statement (2) is correct, statement (1) is incorrect. b. Both statements are incorrect. c. Statement (1) is correct, statement (2) is incorrect. d. Both statements are correct.

Consider the following two statements on individual labor supply decisions in a perfect labor market: (1) If the choice of hours of work is restricted the reservation wage goes up.(2) The reservation wage separates employment from unemployment. What can you say about these two statements? Question 8Answer a. Statement (2) is correct, statement (1) is incorrect. b. Both statements are incorrect. c. Statement (1) is correct, statement (2) is incorrect. d. Both statements are correct.

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter13: Earnings, Productivity, And The Job Market
Section: Chapter Questions
Problem 11CQ
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Consider the following two statements on individual labor supply decisions in a perfect labor market:

(1) If the choice of hours of work is restricted the reservation wage goes up.
(2) The reservation wage separates employment from unemployment.

What can you say about these two statements?

Question 8Answer

a.
Statement (2) is correct, statement (1) is incorrect.
b.
Both statements are incorrect.
c.
Statement (1) is correct, statement (2) is incorrect.
d.
Both statements are correct.
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